Published: Friday July 6, 2012 MYT 10:36:00 AM
Coastal Energy inks small risk service contract with Petronas
By Joseph Chin
KUALA LUMPUR: Toronto-listed Coastal Energy Company will develop and produce oil from three small fields offshore Peninsular Malaysia under a small field risk service contract with Petroliam Nasional Bhd.
According to Coastal Energy, it would focus on the Kapal, Banang and Meranti cluster of small fields (KBM cluster) where 17 wells would be drilled of which 10 would be at Kapal, four at Banang and three at Meranti.
The KBM Cluster fields are within 20 kilometers of each other in a water depth of 60 meters. The main oil reservoirs are Miocene aged sandstones ranging in depths from 3,800 feet to 7,800 feet.
Under the contract, Coastal is finalising an arrangement for a Malaysian company to participate in the Small Field RSC for 30%-40% equity interest.
"Coastal will provide the upfront development capital, undertaking the development drilling and production of the KBM Cluster. Petronas will remain the owner of the project," it said.
Costal expects would be paid a remuneration fee based on key performance indicators including the timely implementation of the agreed field development plan and budget.
First oil from the Kapal field is scheduled within one year followed by production from the Banang field a year later. Coastal will develop the fields using mobile offshore production units (MOPUs) and floating storage and offloading tankers.