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Petroliam Nasional Berhad (Petronas), the national oil company of Malaysia, has formally awarded Talisman Malaysia Ltd. and Petronas Carigali Sdn. Bhd. a new production sharing contract (PSC) for the continuing production, further development and improved recovery of crude oil from the Kinabalu oil fields, which comprise of the Kinabalu Main, Kinabalu East and Kinabalu Far East fields offshore Sabah, Malaysia. The Kinabalu oil fields have a number of producing, mature fields, with significant development upside.
This new PSC is the first of a new "progressive volume-based" (PVB) PSC to be awarded by Petronas. The PVB PSC was specifically designed to incentivize contractors to improve oil recovery and increase production from mature oil fields.
Talisman and Petronas Carigali plan to invest over $1 billion to increase oil recovery and production over the life of the PSC. Talisman will hold a 60% working interest and operate the PSC; and Petronas Carigali will hold the remaining 40%.
Ron Aston, vice president and country manager for Talisman Malaysia, said, "This PSC will allow Talisman to offer new opportunities for career growth to our existing Malaysian staff, many of whom have gained world-class experience on Talisman's existing assets in Peninsular Malaysia. At the same time, development and production of the Kinabalu oil fields offers opportunities for new jobs and new suppliers in Sabah, Labuan and across Malaysia."
The Kinabalu oil fields are currently operated by Shell, with the current PSC expiring in late December 2012.