Page 12 - AsianOil Week 46

AsianOil SOUTHEAST ASIA AsianOil

Malaysian state continues quest

for greater upstream control

POLICY THE Malaysian state of Sarawak has said it wants
current talks with the federal government to lead
to it assuming full control over the state’s oil and
gas industry.
The two branches of government are cur-
rently holding discussions alongside the coun-
try’s national oil company (NOC) Petronas over
the future management of Sarawak’s natural
resources.
“The state government is fully committed to Sarawak Deputy Chief Minister Awang Tengah
taking control of the exploration and mining of Image: Star Media
oil and gas within the territorial boundaries of
the state,” Sarawak Deputy Chief Minister Amar future, with licences to be awarded in the first
Awang Tengah Ali Hasan told the state assembly quarter of next year. SK433, believed to be an
on November 13. onshore extension of the Baram Delta field, will
Awang Tengah said his government was not be split into two mining leases and a prospecting
only pushing for both a greater stake of the state’s licence. Petros intends to offer SK334 under a
oil and gas production but also for the complete single contract.
control of onshore projects, equity participation The Sarawak government will likely to rely
in existing offshore blocks as well as a framework on its petroleum product State Sales Tax (SST) to
for future offshore auctions. help fund its Petros ambitions in the short term.
The Sarawak government created Petroleum Awang Tengah said last week that SST collec-
Sarawak (Petros) in August 2017 to deliver on tions had amounted to MYR3.09bn ($756.4mn)
that goal and the company announced at the in 2019 after the Kuching government resolved
start of this month that it would directly oversee its tax dispute with Petronas.
the development of two onshore blocks. “More revenues from investments in down-
Petros’ executive vice-president of upstream. stream industries like [liquified natural gas]
James Foo, said the company intended to hold LNG plants and through equity participation in
a bid round for SK433 and SK 334 in the near offshore blocks are expected in future,” he said.™

EAST ASIA

Sinopec’s gas production to slow this year

PERFORMANCE CHINA’S state-run Sinopec Corp. has revealed The company has already committed to
that it expects natural gas production growth to boosting gas output to 40 bcm per year by 2023,
slow significantly this year, despite the country’s when it will account for more than half of its total
rising demand for the fuel. production. In comparison, 2019’s production
Sinopec said on November 19 that its pro- of 29.67 bcm was equivalent to 41% of Sinopec’s
duction was slated to rise by just 1.1% this total output.
year to around 30bn cubic metres, after gain- Sinopec’s revelation of weaker gas produc-
ing 7.2% in 2019 to 29.67 bcm. The state giant tion in the first nine months comes as all of the
revealed that its output had actually dipped
in the first nine months of the year, shrinking
0.2% to 21.87 bcm.
While the company failed to explain why its
production growth was slowing, it took the time
to note that “natural gas has become a significant
growth point of profit margins” owing to falling
development costs.
As questions rise over the long-term future
of oil, China’s energy majors have begun
switching their focus to gas projects, and Sin-
opec is no exception.

P12 www. NEWSBASE .com Week 46 19•November•2020