Shell Malaysia said Tuesday that output at mature oil fields that it is operating in North Sabah, east Malaysia, are declining at 5% a year, which is much better than the double-digit rate decline experienced by other other Malaysian fields.
"[This is achieved] through a lot of asset integrity work, a lot of wells management ... On a fleet to portfolio basis, our oil fields in Sabah are the ones that have the least decline rates for mature fields," Anuar Taib, Shell Malaysia chairman, told reporters at a briefing Tuesday on the sidelines of the 16th Asia Oil & Gas Conference in Kuala Lumpur, Malaysia.
Shell has interests in more than 10 production sharing contracts in offshore blocks in Sabah and Sarawak.
Shell has said that it will help Malaysia's national oil company Petronas sustain production as well as find more oil from existing wells through enhanced oil recovery technology.
In his keynote speech Monday, Petronas' President and CEO Shamsul Azhar Abbas said that many of the country's producing fields have matured as decades of steady and continuous production are beginning to take its toll.
"Sustaining national crude oil production has indeed been extremely challenging," he said.
Still, geologically complex frontier acreages such as those in deepwater and high pressure/high temperature reservoirs are expected to make important contributions toward efforts in sustaining national production.
Petronas believes that a potential resource addition of up to 1.7 billion barrels of oil equivalent can be achieved through a combination of initiatives including enhanced oil recovery, accelerated small and marginal development and renewed focus on new plays including basement reservoirs, Shamsul said.
Malaysia has said that it plans to increase exploration and production in deepwater oil and gas projects off the eastern state of Sabah, which is already the region's hot spot for oil and gas exploration, with 20 production sharing contracts and 16 discoveries to date.
The largest projects include the Shell-operated Gumusat/Kakap crude oil fields, 120 km offshore Sabah, with a planned production capacity from 2012-13 of 135,000 b/d from reserves estimated at 536 million barrels of oil equivalent. The oil and gas will be moved from 19 subsea wells by pipeline to the new oil and gas terminal in Kimanis.
Meanwhile, the Kikeh block, offshore Sabah, has been able to produce up to 120,000 b/d of sweet crude oil since August 2007 from a floating production storage and offloading platform operated by Murphy Oil, from reserves estimated at 620 million boe.
Other local exploration projects include the 108 million boe Malikai deepwater reserve operated by Shell, which is at the field development stage and expected to be on stream in 2014-15; as well as the Shell-operated Ubah Crest and Pisangan oil fields, which are still in the planning stage. Conoco-Philips' 2.2 Tcf Kebabangan and Shell's 2.2 Tcf Kamunsu gas projects are also still in the planning stage.
