Ophir Oil Field Development, Malaysia

Octanex will be the operator of the Ophir oil field.

Located offshore Peninsular Malaysia, Ophir is a marginal oil field being developed by Ophir Production, a joint venture of field operator Octanex with a 50% interest, Scomi Energy Services (30%) and PETRONAS subsidiary Vestigo Petroleum (20%).

Lying in a water depth of 70m, the field was discovered by the Ophir-1 well and appraised by four appraisal wells.

The field is being developed under a risk service contract (RSC) that was granted in 2014 to Ophir Production. The RSC was introduced by PETRONAS in 2011 as a new petroleum arrangement that is focused on upstream Malaysian oil and gas activities, as well as the development of smaller and stranded oil and gas reserves.

"The new field development plan was approved by PETRONAS in September 2015."

According to the terms of the RSC, the field will be operated by the contractor, while PETRONAS will be the resource owner. A total of five RSCs have currently been awarded by PETRONAS.

The RSC for the Ophir development has a seven-year period, with production expected to start in 2017.

Ophir oil field background and development details

Declining oil prices affected the field development plan that was revised accordingly to take advantage of low industry costs. Cost savings of approximately 30% were identified and the capital budget was amended to $90m. The new field development plan was approved by PETRONAS in September 2015.

PETRONAS announced a third round of RSC approval in April 2013. Octanex qualified as a bidder and a bid was subsequently submitted for developing the Ophir field in August 2013.

Development plans for the field involve a low-risk development concept that includes a standalone development and drilling of three production wells from a single wellhead platform. A leased floating production, storage and offload (FPSO) vessel will be used for storing and offloading crude for export purposes.

The total cost of the field development is estimated to be $135m and the production is expected to be 5.1 million barrels of recoverable oil.

Drilling at Ophir

The three horizontal production wells at Ophir were drilled using the NAGA 2 jack-up rig. The drilling was commenced in June 2017 and completed in August, ahead of schedule.

The first well, A1, was drilled to a total depth of 3,275m with a horizontal length exceeding 1,280m. The A2 well was drilled to a 3,070m depth with a horizontal length of 1,00m, while the total depth of A3 was 3,332m and its horizontal depth was more than 1,100m.

Details of the Ophir wellhead platform and FPSO

The wellhead platform for Ophir includes 350t topsides on a jacket supported by a suction pile foundation.

An oil tanker named Puteri Bangsa will be converted into an FPSO and leased to serve the Ophir field. Named MTC Ledang, the FPSO will have a processing capacity of 15,000 barrels of fluid a day and storage capacity of 350,000 barrels of crude.

The FPSO will be connected to the wellhead platform using an 8in-diameter pipeline.

Financing of the Ophir oil field development

A syndicate comprising Malayan Banking (Maybank), RHB Bank and United Overseas Bank is financing the project. A loan of up to $118.76m will be provided to cover 75% of the planned expenditure for a period of four years, in addition to a bank guarantee facility of $13.5m.

Octanex's share of the project will be completely covered by the 75% project financing and its funding arrangement with Sabah International Petroleum, a wholly owned company of the State of Sabah.

Key players involved with the Ophir oil field development

Muhibbah Engineering was awarded a contract to provide engineering, procurement, construction, installation and commissioning (EPCIC) of a wellhead platform for the Ophir oil field.

Muhibbah Engineering's Klang yard located 40km south-west of Kuala Lumpur was used to fabricate the Ophir platform before installing it at the Ophir field. The platform construction was started in February 2016. Netherlands-based SPT Offshore was subcontracted by Muhibbah Engineering to transport and install the platform offshore. The installation was completed by in April 2017.

Malaysian company UMW Offshore Drilling was awarded the contract to provide jack-up drilling rig services for the field, in November 2016. UMW mobilised the NAGA 2 jack-up drilling rig to the project site, as part of the contract.

MTC Engineering, a marine contractor based in Malaysia, will perform the FPSO conversion as part of a lease contract signed for the Ophir field for three years, including a one-year extension option.