Malaysia’s Petronas has signed a production sharing contract (PSC) for Block 2K, located off the coast of Sabah, with a joint venture (JV) of Shell, TotalEnergies, and Petronas Carigali Sdn Bhd (PCSB).

The contract has been signed between TotalEnergies subsidiary TotalEnergies EP Malaysia (TE), PCSB, and Shell subsidiaries Sabah Shell Petroleum Company Limited (SSPC), and Shell Sabah Selatan Sdn Bhd (SSS).

Located in the prolific north-west ultra-deepwater area within a hydrocarbon basin with ‘promising hydrocarbon potential’, Block SB 2K will be operated by TotalEnergies EP Malaysia with a 34.9% stake.

PCSB owns a 40% interest while SSPC and SSS will equally own the remaining 25.1% interest in the block.

Malaysia Petroleum Management (MPM) senior vice-president Mohamed Firouz Asnan said: “The signing of the PSC for Block 2K completes the licensing of the five ultra-deepwater blocks off the coast of Sabah, along the newly identified Oligo-Miocene carbonate trend proven by Tepat-1 oil discovery in Block N in 2018. Block 2V was signed last year, followed by Blocks 2W and X early this year.”

Between 2022 and 2023, a total of four wells are planned to be drilled in the Block 2K ultra-deepwater block to explore for potential hydrocarbon reserves.

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Via MPM, Petronas manages petroleum arrangements and provides stewardship on upstream petroleum activities in Malaysia.

Last month, Shell and Petronas decided to move ahead with the development of the Rosmari-Marjoram gas fields offshore Malaysia.

SSB owns an 80% operating stake in the Rosmari-Marjoram project, which features the development of the offshore fields. Petronas’ upstream unit Carigali owns the remaining stake.

The project is expected to have a production capacity of 800 million standard cubic feet per day of gas and is scheduled to start production in 2026.