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Octanex announces Malaysian joint venture contract

12th June 2014

Octanex has announced that it, together with its joint venture partners, been awarded a risk service contract in respect of the Ophir Field by Petronas

Octanex announces Malaysian joint venture contract
OPSB will develop the Ophir oil field via a low risk development concept involving three production wells, a single wellhead and production platform and export and storage of oil by floating storage and offloading unit

Octanex, together with its two Malaysian joint venturers, Scomi D&P Sdn Bhd (Scomi) and Vestigo Petroleum (Vestigo), has incorporated 'Ophir Production Sdn Bhd' (OPSB) to undertake the contract, with Octanex holding a 50 per cent interest, Scomi 30 per cent and Vestigo 20 per cent.

OPSB will develop the Ophir oil field via a low risk development concept involving three production wells, a single wellhead and production platform and export and storage of oil by floating storage and offloading unit.

“The award of the Ophir RSC is an important milestone for Octanex's broadened strategy to include the acquisition of near term production assets,” said Geoff Albers, Octanex chairman.

Petronas introduced the risk service contract (RSC) in 2011 as a new petroleum arrangement designed with the objective of intensifying upstream Malaysian oil and gas activities and developing smaller, stranded oil and gas resources.

The RSC model balances the sharing of risks with fair returns for the development and production of discovered small fields. Under the terms of the RSC, the contractor is the service provider and operator of the field, while Petronas is the resource owner.

Upfront investment of capital is contributed by the contractor, with the contractor compensated via the reimbursement of costs plus a remuneration fee for services rendered. The remuneration fee is linked to production volumes as well as certain key performance indicators.

The third round offer of RSCs was commenced in April 2013. Octanex established a presence in Malaysia and appointed Frank Jacobs to head up the review and bidding process. Octanex qualified as a bidder and submitted a bid for development of the Ophir Field in August 2013.

Scomi is a wholly owned subsidiary of Scomi Energy Services, a Malaysian downstream oil and gas services company. Vestigo is a fully owned subsidiary of Petronas Carigali, incorporated in 2013 with a focus on the development of small, marginal and mature fields.

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