Malaysian oil and gas company, PETRONAS, has awarded Vestigo Petroleum Sdn. Bhd. the South East Collins Cluster Production Sharing Contract (PSC) aimed at monetizing an array of small, discovered resource opportunities in Malaysian waters. This move aligns with PETRONAS’s strategy to exploit smaller fields which, despite their size, represent valuable assets within the country’s oil and gas sector.

Under the terms of the newly introduced Small Field Asset (SFA) PSC, Vestigo is tasked with preparing the South East Collins Cluster for development. This cluster is situated in water depths ranging from 42 to 45 meters, approximately 70 km northeast of Labuan Island, and includes two fields: South East Collins and Lokan. Discovered in the 1980s, these fields have combined estimated recoverables of around 10 million stock tank barrels (MMstb).

Mohamed Firouz, PETRONAS Senior Vice President of Malaysia Petroleum Management, emphasized the significance of this award under the new fiscal framework: “The award of the cluster of fields under the much-anticipated new fiscal terms is expected to spur the development and production of more small fields in the future. The new SFA PSC is aimed at monetizing an inventory of small, discovered resource opportunities available in Malaysian waters. Vestigo was chosen based on its track record as a low-cost operator in developing and operating small fields.”

He further highlighted the necessity for operators to adapt and innovate: “We welcome operators who are specialized in the development of small fields to extend their capabilities here in Malaysia. For many of these fields to work, we need operators with the right mindset and business model to take advantage of the customized fiscal and non-fiscal terms offered by PETRONAS. Under the current volatile oil prices, these operators must also employ innovative solutions to ensure the lowest total life cycle cost.”

Vestigo Petroleum, a wholly owned subsidiary of PETRONAS Carigali Sdn Bhd, is known for its expertise in operating small field projects. It currently manages multiple PSCs including the Irong Cluster PSC, SK315 PSC, PM335 PSC, and the Tembikai Chenang Small Field Risk Sharing Contract, underscoring its role as a critical player in Malaysia’s oil and gas industry focused on maximizing the potential of smaller reserves.

This move by PETRONAS through Vestigo underscores the strategic shifts in the oil and gas industry where focus is diversifying towards smaller, yet viable resources to ensure sustainable energy production and economic benefits amidst market fluctuations and the global energy transition.

  Malaysia, Mohamed Firouz, Petronas, South East Collins Cluster, Tembikai Chenang, Vestigo Petroleum