Projects

Ophir Oil Field Development

Ophir is a marginal oilfield located offshore Peninsular Malaysia in 70m of water.

Project Type

Oil field development

Location

Offshore Peninsular Malaysia

Ownership

Scomi Energy Services (30%) and Vestigo Petroleum (20%)

Operator

Octanex

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Octanex will be the operator of the Ophir oil field.

Ophir is a marginal oilfield located offshore Peninsular Malaysia in 70m of water.

It is being developed by Ophir Production, a joint venture (JV) comprising field operator Octanex , which currently holds 50% interest in the field, as well as Scomi Energy Services (30%) and PETRONAS subsidiary Vestigo Petroleum (20%).

The field was discovered by the Ophir-1 well and appraised by four appraisal wells. It is being developed under a risk service contract (RSC) that was granted to Ophir Production in 2014.

The RSC was introduced by PETRONAS in 2011 as a new petroleum arrangement that is primarily focused on upstream Malaysian oil and gas activities, in addition to 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.

PETRONAS has awarded a total of five RSCs for the project to date.

The RSC for the Ophir development has a seven-year period and first oil was produced on 20 October 2017.

Initial production continued for 25 days and produced a maximum of 3,000 barrels of oil per day (bopd).

The first lifting of crude was completed in the fourth quarter of 2017.

Ophir oil field background and development details

Declining oil prices affected the field development plan, which 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 the development of the Ophir field in August 2013.

Development plans for the field involve a low-risk development concept, which 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 to store and offload crude for export purposes.

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

Drilling at Ophir

Ophir’s three horizontal production wells were drilled using the NAGA 2 jack-up rig. The drilling commenced in June 2017 and was 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 depth of 3,070m 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.

It was fabricated at Port Klang, Malaysia, before being shipped to the field in March 2017.

An oil tanker named Puteri Bangsa will be converted into an FPSO and leased to serve the Ophir field.

The FPSO is known as MTC Ledang and has a processing capacity of 15,000 barrels of fluid a day and a storage capacity of 350,000 barrels of crude.

It is anchored to the seabed and connected to the wellhead platform via 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 development will be completely covered by the 75% project financing, as well as the company’s funding arrangement of a $12m convertible note facility 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 oilfield.

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’s construction began 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 a 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.

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

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