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Reuters: Malaysia Petronas sees Gumusut oil onstream by 2011

Mon Jun 12, 2006 2:25 AM ET

KUALA LUMPUR, June 12 (Reuters) – Malaysian state oil company Petroliam Nasional Bhd. (Petronas) expects its Gumusut oilfield to come onstream by 2011, Chief Executive Hassan Marican said on Monday, with daily production estimated at 150,000 barrels.

A joint venture of exploration and development arm Petronas Carigali, Royal Dutch Shell and U.S. oil firm ConocoPhillips said in March 2004 it had hit oil at Gumusut, in deepwater block J off the eastern state of Sabah.

Shell operates the block, off the northwestern coast of the heavily jungled state on the island of Borneo, in which Shell Malaysia and ConocoPhillips each holds 40 percent of the equity, while Petronas Carigali has the rest.

Initial indications were that the Gumusut crude oil was light and of high quality, Shell said at the time.

Petronas is developing new capacities for future production, Hassan told reporters on the sidelines of the Asia Oil and Gas Conference in the Malaysian capital.

“So with the new developments of oil and gas, we should be able to maintain the national production for the future, and also maintain the gas production to meet domestic and LNG demand,” he added.

Another key development effort is focused on the Kikeh field, Malaysia’s first deepwater development, where recoverable reserves have been estimated at 400-700 million barrels.

“Production is scheduled for early fourth quarter next year,” Hassan said. “It is on schedule and production will be around 120,000 barrels per day.”

The Kikeh development is in offshore Block K, and is operated by Murphy Oil Corp. with an 80 percent working interest. Petronas Carigali holds the rest.

Petronas is currently pumping 720,000 barrels of oil and condensates each day and produces 5.5 billion cubic feet of natural gas, Hassan added, but gave no comparative figures.

Petronas continues to supply gas to state-controlled power producer Tenaga Nasional Bhd. at a fixed price set by the Malaysian government in the aftermath of the 1997 Asian financial crisis, Hassan said.

“That is still applicable today,” he said when asked if the rate would be increased. The price Tenaga pays is well below market rates, and Petronas had been lobbying for an increase.

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