UK-based Salamander Energy signed a production sharing contract (PSC) for block PM322, its first licence in Malaysia.

According to the oil and gas exploration and production company, block PM322 is in the Melaka Straits on the Malay side of the Central Sumatra Basin, offshore of West Coast Peninsular Malaysia.

The company said it will operate the PSC with a working interest of 85%. The block is said to contain the Port Klang oil discovery made by Sun Oil in 1991, in the same drilling campaign.

The campaign also resulted in discovery of the Bualuang oil field operated by Salamander in the Gulf of Thailand.

Located in shallow water, the offshore area covers an area of about 20,000km² and has seen a limited drilling with only six wells ever drilled on the Malaysian side of the Melaka Strait.

So far, two discoveries were reported and the extension of the Sumatran basins into Malaysian waters has been demonstrated, which indicated the hydrocarbon potential of the acreage.

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By GlobalData

Shooting 3D seismic and drilling one exploration well is part of the committed work programme before December 2016, according to the company.

Salamander Energy chief executive James Menzies said the company has been planning to venture into Malaysia for some time and could find an opportunity that is a strategic fit with its model of building out from discovered resources.

"There are numerous fallow discoveries in Malaysia that would provide further running room in country and we look forward to building a successful business in Malaysia over the coming years," Menzies added.

The group focuses on growth assets in and around three core areas including Greater Bualuang, Gulf of Thailand; North Kutei, Indonesia; and Greater Kerendan, Indonesia.

Nri energy