By DayakDaily Team
KUCHING: The Baram Junior Cluster small field asset production sharing contract (PSC) is moving ahead with the US$235 million investment approved by Petronas and analysts are optimistic about this progress given the opportunities this field presents.
In a filing on Bursa Malaysia yesterday, Dialog Group Bhd (Dialog) announced that the field development and abandonment plan (FDA) has achieved final investment decision amounting to US$235 million and has been approved by Petronas on Jan 8, 2025.
The PSC agreement, which was signed in Jan 17, 2023, involves Petronas, Dialog Resources Sdn Bhd (Dialog Resources), and Petroleum Sarawak Exploration and Production (PSEP).
The 14-year contract comes with a two-year pre-development phase that allows Dialog Resources and PSEP to finalise the field development plan and move into two-year development phase with first commercial production expected by the end of the phase.
The production phase will continue for the remaining 10 years or up to the expiry of the contract, whichever is earlier.
Analysts are generally positive on this development given the field’s feasible location and opportunities it presents for oil and gas (O&G) players involved in the project.
In a report, the research team at MIDF Amanah Investment Bank Bhd (MIDF Research) said: “We reiterate our positive view on the Baram Junior Cluster, given its feasible location and opportunity to further develop into deepwater plays.
“Given the unexplored regions within the Baram Delta in the Sarawak Basin, we opine that the 14-years of PSC given to Dialog is fair to progress the area, thus signalling a boost in upstream activities in Malaysia for years to come.”
It added, “We anticipate that the upstream division will continue to be robust, given the expected higher demand for LNG within the region, as well as recent discoveries of oil and gas fields within offshore Peninsular and East Malaysia.”
In a separate note, Kenanga Investment Bank Bhd’s research team (Kenanga Research) pointed out that while production details are limited, comparing to Dialog’s previous projects at D35/D21/J4 fields located offshore Sarawak (capital expenditure of US$120 million), there is a potential RM0.26 per share accretion if Baram Junior proves successful.
“Past successes at Bayan and D35/D21/J4 in the same basin suggest manageable execution risks,” it added. — DayakDaily
