Roc and Dialog Group will form a joint venture with a subsidiary of Petronas for the development of the oil and gas fields in the Balai Cluster, located offshore Sarawak, Malaysia.

The three companies will ink a small field risk service contract in which Petronas will remain project owner, while the joint venture will provide capital investment.

The pre-development phase, estimated at around $250m, will begin later this year and is expected to take up to 18 months to complete, reports upstreamonline.com.

Based on the viability of the pre-development phase, the companies will move to the development phase, which is estimated to cost around $700m.

First oil from the project is expected in the second half of 2013 and first gas by the second half of 2014.

Roc will own 48% of the joint venture while Dialog will hold 32% and Petronas Carigali 20%, reports upstreamonline.com.