Huge Oil reserves found off Sarawak’s coast to boost Government coffers

Can this newfound bonanza, rivals the oil rich found off Brunei-Limbang coast or better known as Block L and Block M (block CA1 and Block CA2) which is valued at more than RM1 trillion..??

As reported by The Star Online on 15 February 2011

PETALING JAYA: Petroliam Nasional Bhd (Petronas)’s persistency in exploring for the precious commodity within Malaysia has struck gold with major oil and gas reserves discovered off the coast of Sarawak.

Some 100 million barrels of oil and 2.8 trillion standard cubic feet (tscf) of natural gas were discovered from two exploration blocks there.

Spurred by the success, Petronas plans to drill more than 50 exploration wells off Malaysia over the next three years.

“These activities, especially if they result in discoveries, are expected to boost business opportunities in the oil and gas industry and will promote upstream investment in the country,” it said in a press statement yesterday.

A research report said the new oil and gas finds represent 2% of oil reserves and 3% of natural gas reserves.

“These new discoveries underpin our optimism for the industry, as (they) prolong the lifespan of Malaysian reserves – 24 years for crude oil and 38 years for natural gas,” said the report by AmResearch yesterday.

Commenting on the latest find, Petronas said 2.6 tscf of natural gas was struck after drilling almost 4km below sea level at the NC3 well at the SK316 block.

Over at another block called SK306, some 100 million barrels of oil reserves and 0.2 tscf of gas were found after drilling extended beyond 3km.

The well at SK306 block, called Spaoh-1, is currently being prepared for production testing.

Production test results had shown that the deposits were technically recoverable, added the statement.

The decision to concentrate on exploration activities in Malaysia rather than overseas was made recently, with Petronas deciding to engage Malaysian companies to help drill for oil at marginal oilfields offshore.

Petronas had found 106 marginal fields containing 580 million barrels of oil, and believed the high price of crude today makes such drilling activity viable.

The recent findings of new oil and gas fields by Petronas offshore Sarawak are expected to boost the country's reserves.

Petronas' total average production for oil and gas has been declining for the past two years to 1.63 million barrels of oil equivalent (BOE) per day in the financial year ended March 31, 2010 (FY10) from 1.67 million BOE per day in FY08.

The 1.63 million BOE per day comprised 535,000 BOE of crude oil, 974,000 BOE of natural gas and the rest condensates.

AmResearch said as Malaysia had 85 trillion cu ft of gas reserves with oil reserves at 5.8 billion barrels in FY10, the new discoveries accounted for 3% of the country's natural gas reserves and 2% of its oil reserves.