Petronas signs oil contract

Petronas signs oil contract

KUALA LUMPUR (AFP): Malaysia's Petroliam Nasional Bhd. (Petronas) said it had signed an oil production-sharing contract with Sarawak Shell Bhd. for a deepwater block off resource-rich Miri, in eastern Sarawak state.

Shell will have 80 percent interest and will be the operator of the block located about 100 kilometers (160 miles) off Miri, said Hassan Marican, president and chief executive of the national oil corporation.

Petronas' exploration arm, Petronas Carigali, will hold the remaining 20 percent interest in the block.

This would be the second deepwater deal clinched by the Dutch- based Shell, the first being a block off Malaysia's eastern state of Sabah secured in January last year.

It also represented the sixth deepwater block to be awarded by Petronas, with the other four being given to American-based Mobil.

"Under the terms of the deepwater production sharing contract, the exploration period will be seven years, the development period 6 years and the production period 25 years," he said.