Shell Malaysia, along with its joint venture partners, has taken the final investment decision to develop the Malikai oil field located about 100km offshore of Sabah, Malaysia.

Shell Malaysia holds 35% interest in the project, while other joint venture partners ConocoPhillips and PETRONAS Carigali, hold 35% and 30% interest respectively.

Located in water depths of about 500 metres, the oil field is operated by Sabah Shell Petroleum Company and is part of the Block G PSC awarded by PETRONAS in 1995.

Believed to be Malaysia’s third deepwater project, the Malikai oil field development will involve drilling 17 wells from a 23,500t tension leg platform (TLP) production facility, which will be the first TLP to be fabricated and installed in the country.

"Located in water depths of about 500 metres, the oil field is operated by the Sabah Shell Petroleum Company."

The engineering, procurement and construction contracts for the TLP have already been awarded, said the oil major.

Shell Malaysia chairman Iain Lo said Malikai is an important oil development in the company’s upstream portfolio and has the ability to confirm the country’s position as a regional deepwater hub and centre of excellence.

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"The success of Malikai will leverage on strengths derived from deepwater expertise already embedded in Malaysia, as well as draw on global expertise from our leading deepwater position. The project also continues the development of local deepwater capabilities in Malaysia," Lo added.

On 20 November 2012, Shell announced the first initial oil production from the Gumusut-Kakap (GK) field, Malaysia’s second deepwater development. Located about 120km offshore in water depths of up to 1,200 metres, deep in Blocks J and K, the GK field has been developed using 19 subsea wells.

Image: The Shell-operated Gumusut-Kakap deepwater oil and gas project.