Petronas shutdown of one of its oil platforms, after a thin layer of oil was spotted

Petronas makes up for shutdown

KUCHING: Over the weekend, Petroliam Nasional Bhd (Petronas) saw the shutdown of one of its oil platforms and production pipelines offshore in eastern Peninsular Malaysia in an emergency procedure after a thin layer of oil was spotted in nearby waters.

REPLACING PRODUCTIVITY: For the time being, the research firm understands that Petronas is replacing the lost gas production by increasing the output of its other fields off the peninsula. 

According to a research report released yesterday by AmResearch Sdn Bhd (AmResearch), key sector player Petronas Gas Bhd (Petronas Gas) did not specify which oilfields were affected.

Petronas indicated that the facilities located 240 kilometres (km) offshore Malaysia were operated by Petronas’ production sharing contractors, including upstream unit Petronas Carigali, ExxonMobil Exploration and Production Malaysia and Newfield Peninsular Malaysia.

Several oil and gas fields including Tapis, Seligi, Guntong, Semangkok, Irong Barat, Tabu and Palas were located off Malaysia’s east coast, added AmResearch.

Following standard procedures, emergency response and oil spill teams including those from the Petroleum Industry of Malaysia Mutual Aid Group and East Asia Response Ltd were mobilised.

The research house’s channel checks indicated that the affected oil field produced some 100 to 150 million standard cubic feet per day (mmscfd) in gas. This represented up to seven per cent of Petronas Gas’ financial year 2010 (FY10) output of 2,088mmscfd.

For the time being, the research firm understood that Petronas was replacing the lost gas production by increasing the output of its other fields off the peninsula.

Under the fourth Gas Processing and Transmission Agreement (GPTA) effective since April 1 this year, it was estimated that the new transportation remuneration payment amounted to 48 per cent of Petronas Gas’ throughput revenue.

The variable flow rate incentive of RM0.22 per gigajoule (GJ) was unlikely to have any significant impact as gas production was assumed to be below the 2,100mmscfd threshold.

Assuming that the gas production dropped by 150mmscfd, AmResearch estimated that the lower transportation remuneration would shave the group’s net profits by RM5 million per month or 0.4 per cent of the FY11F earnings.

Pending further developments on the shutdown, the research house pegged Petronas Gas’ fair value at RM11.30 per share.


by Borneo Post