Award of Malaysian RSC
An Octanex led joint venture has been awarded a risk service contract (RSC) over the Ophir Oil Field located offshore of Peninsula Malaysia. The JV company awarded the contract, Ophir Production Sdn Bhd (OPSB), comprises Octanex and the Malaysian companies Scomi Energy and Vestigo Petroleum. Octanex holds a 50% interest in OPSB, with Scomi and Vestigo holding 30% and 20% respectively.
OPSB plans to develop the Ophir Oil Field via a low risk development concept that will see first oil expected in 18 months. This development concept involves three production wells, a single wellhead and production platform and the export and storage of oil via a Floating Storage and Offloading Unit.
Chairman of Octanex, Geoff Albers, commented that “The award of the Ophir RSC is an important milestone for Octanex’s broadened strategy to include the acquisition of near term production assets.”
“In late 2012, the Board decided to expand Octanex’s focus to include near-term production assets. The Ophir RSC is a significant step in the transformation from an Australia and New Zealand focused exploration company to a south east Asia focused exploration and production company. Octanex looks forward to pursuing further projects in Malaysia with Vestigo and Scomi.” he said.
The Malaysian national oil company, PETRONAS, introduced RSCs as a new petroleum arrangement designed with the objective of intensifying upstream Malaysian oil and gas activities and developing smaller, stranded oil and gas resources. The RSC model is intended to balance the sharing of risks with fair returns for the development and production of discovered, small fields. Under the terms of the RSC, the Contractor is the service provider and Operator of the field, while PETRONAS is the resource owner. Upfront investment of capital is contributed by the Contractor, with the Contractor compensated via the reimbursement of costs plus a remuneration fee for services rendered. The remuneration fee is linked to production volumes as well as certain key performance indicators.