Petronas Carigali, Malaysia's national upstream company, is farming out a 20% interest in the 2011 North Sabah Enhanced Oil Recovery production sharing contract (2011 NSEOR PSC) to SMJ Energy (SMJE), a company wholly owned by the Sabah state government.

Asset and Transaction Details

The 2011 NSEOR PSC covers the Barton, South Furious, SF30, and St Joseph fields in shallow waters offshore Sabah. Upon completion of this transaction, the participating interests will be revised: Hibiscus Petroleum will remain the operator with 50%, Petronas Carigali's non-operating interest will be reduced to 30%, and SMJE will hold 20%.

Existing and Expanding Partnership

This deal builds on an existing partnership between the two companies. They previously entered a farmout agreement for the Samarang PSC in 2023 and are also partners in several other offshore Sabah blocks (SB 403, SB 306A, SB 306B). The collaboration extends beyond upstream operations, as SMJE recently acquired a 25% equity stake in the under-construction PFLNG 3 (ZLNG) floating LNG facility.

Strategic Rationale

Petronas Carigali's chief executive stated the agreement reflects a commitment to win-win partnerships that accelerate value creation and strengthen Malaysia's upstream ecosystem. The partnership is framed as being built on mutual trust and shared objectives, aiming to unlock sustainable value and advance local capability development in Sabah. Petronas reiterated its steadfast commitment to strengthening partnerships with state and industry players to responsibly develop the nation's hydrocarbon resources.