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Coastal Energy Co. has entered into a small field risk service contract (RSC) with Petroliam Nasional Berhad (PETRONAS) for the development and production of petroleum from the Kapal, Banang and Meranti cluster of small fields offshore Peninsular Malaysia.
Coastal, with 100% equity interest under the small field RSC, will be the operator of the KBM fields. In accordance with the small field RSC, Coastal is currently finalizing an arrangement for a Malaysian company to participate in the small field RSC for 30-40% equity interest.
Coastal will provide the upfront development capital, undertaking the development drilling and production of the KBM cluster. PETRONAS will remain the owner of the project. Subject to its performance, Coastal will recover its capital and operating expenditures and will be paid a remuneration fee, which will be adjusted by key performance indicators based on the timely implementation of the agreed field development plan and budget.
First oil from the Kapal field is scheduled within one year followed by production from the Banang field a year later. Coastal will develop the fields using MOPUs and FSO tankers similar to the method used to develop its assets offshore Thailand. A total of seventeen wells will be drilled with ten planned at Kapal, four at Banang and three at Meranti.