By WU VUIDE
KUALA LUMPUR: SMJ Energy Sdn Bhd (SMJE) has acquired a 20 per cent participating interest in the North Sabah Enhanced oil recovery production sharing contract (EOR PSC) following the signing of a Farm-Out Agreement (FOA) with Petronas Carigali Sdn Bhd (PCSB) at the Kuala Lumpur Convention Centre (KLCC).
Chief Minister Datuk Seri Hajiji Noor said the initiative reflects the State Government’s long-term strategy to strengthen Sabah’s energy sector through high-quality investments and close collaboration with Petronas.
“With opportunities now expanding across the state from the west to the east coast, we welcome reputable investors to partner with us in ensuring sustainable and lasting benefits for the people of Sabah,” he said after witnessing the exchange of documents in conjunction with the Commemoration of Sabah–Petronas Collaboration.
The acquisition, effective January 1, 2026, follows the Heads of Agreement (HoA) signed between SMJE and PCSB in November 2025, paving the way for the final transaction.
It is SMJE’s second upstream acquisition since entering the Samarang PSC in April 2023, further solidifying its role as a strategic player in Sabah’s oil and gas landscape.
The North Sabah EOR PSC comprises four producing oil fields in shallow waters approximately 70 metres deep offshore Kota Belud.
The asset includes 20 offshore platforms connected by a 143km, 24-inch pipeline that transports crude oil to the Labuan Crude Oil Terminal (LCOT).
Following the transaction, SMJE will assume a 20 per cent non-operating interest, while SEA Hibiscus Sdn Bhd continues as operator with a 50 per cent participating interest and PCSB retains 30 per cent.
The move is expected to raise SMJE’s crude entitlement, increasing its cargo lifting from 4.7 cargoes in 2025 to 7.0 cargoes in 2026, enhancing revenue streams and supply reliability for Sabah.
Deputy Chief Minister II and Finance Minister Datuk Seri Masidi Manjun, who is also SMJ Energy chairman, said North Sabah is a strategic producing asset and SMJE’s participation signals a maturing role for the state in upstream activities.
“This move secures long-term value, builds commercial capability, and ensures more benefits flow directly to the people of Sabah,” he said.
He added that under the current Sabah administration, SMJE continues to accelerate value creation through strategic partnerships, local participation and responsible resource management.
Earlier, documents were exchanged for the Heads of Agreement between Petronas and Sabah Energy Corporation (SEC) for the Mutiara Cluster.
The HoA establishes the framework for a future Gas Sales Agreement (GSA) to facilitate the cluster’s development, targeted for the first quarter of 2029.
Documents were also exchanged for the Permata Cluster Production Sharing Contract between Petronas and Bridge Petroleum Limited, a newly appointed Petroleum Arrangement Contractor (PAC). The Permata Cluster is located offshore Sabah.
Hajiji and Petronas president and group chief executive officer Tan Sri Tengku Muhammad Taufik witnessed the exchange of documents for the 2011 FOA for the North Sabah EOR Production Sharing Contract between Petronas Carigali Sdn Bhd, represented by chief executive officer Hazli Sham Kassim, and SMJ Energy Sdn Bhd, represented by chief executive officer Datuk Dr Dionysia Kibat, at KLCC.
