Petronas to cease Berantai RSC in September

Petronas has reached a mutual agreement with Petrofac Energy Developments Sdn Bhd, Kencana Energy Sdn Bhd and Sapura Energy Ventures Sdn Bhd for the cessation of the Berantai Risk Service Contract (RSC) effective Sept 30, 2016.

It said the RSC's cessation would allow the group to minimise the project's long-term value erosion and optimise its development and production activities in Malaysia.

The move was in line with Petronas' efforts to reduce costs and increase the efficiency of its operations, the state-owned oil and gas producer said in a statement today.

"With the cessation of the RSC, Petronas will reimburse the balance of outstanding capital and operational expenditures to the contractors over the following 12 months," it added.

As part of the arrangement, the ownership of the Berantai FPSO will be transferred to Petronas.

The Berantai RSC was the first RSC awarded by Petronas to Petrofac Energy Developments and its two local partners, namely Kencana Energy and Sapura Energy Ventures on Jan 31, 2011.

SapuraKencana Petroleum Bhd President and Group Chief Executive Officer Tan Sri Shahril Shamsuddin said Kencana Energy, Sapura Energy Ventures and Petrofac Energy Developments had managed to operate the facilities over the past four years safely.

"We continue to support Petronas in its efforts to reduce costs and optimise its operations with a view of preserving the long-term value of the project," he said in a statement.