Shell and Mubadala Petroleum swap blocks offshore Malaysia

mubadala-jim sneddon flickrMubadala Petroleum said that drilling in Block SK320 had yielded two new gas discoveries, called Pegaga and Sintok. (Image source: Jim Sneddon/Flickr)Shell and the UAE's Mubadala Petroleum have swapped equity stakes in two exploration blocks off Malaysia, the companies announced

Mubadala Petroleum has taken a 20 per cent interest in the Shell-operated deepwater Block 2B and in turn, Anglo-Dutch company Shell has purchased a 20 per cent interest in the Mubadala-operated Block SK320. Both blocks lie off the coast of the island of Borneo.

Maurizio La Noce, chief executive of Mubadala Petroleum, said, “The equity swap agreement is an important step for Mubadala Petroleum’s growth strategy in Malaysia and marks our first partnership in Southeast Asia with Shell, an important player in deepwater exploration.”

Mubadala Petroleum said that drilling in Block SK320 had yielded two new gas discoveries, called Pegaga and Sintok, Reuters reported.

“We need to do further work to determine the full extent and commerciality of those discoveries,” La Noce added.

Shell is the operator for 13 production sharing contracts (PSCs) in Malaysia and has stakes in five others. Output from these PSCs accounted for nearly half of Malaysia’s total gas production in 2013, Shell said in a statement.

Mubadala Petroleum was awarded its acreage in 2010 and the adjacent Block 2B was awarded to Shell in 2012.

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