Sabah Acquires 20 per cent Stake in Oil Production

Sabah has acquired a 20 per cent interest in the North Sabah Enhanced Oil Recovery Production Sharing Contract (EOR PSC). The EOR PSC includes four producing oil fields located 70 metres offshore Kota Belud. The asset comprises 20 offshore platforms connected by a 143km, 24-inch pipeline which pumps crude oil to the Labuan Crude Oil Terminal (LCOT).

SEA Hibiscus Sdn Bhd is the main operator with a 50 per cent participating interest while PETRONAS Carigali Sdn Bhd (PCSB) holds 30 per cent and Sabah – through SMJ Energy Sdn Bhd (SMJE) – holds the remaining 20 per cent. The signing of the Farm-Out Agreement (FOA) was completed on 9 February 2026 in Kuala Lumpur.

The EOR PSC is SMJE’s second upstream acquisition since entering the Samarang PSC in April 2023 and the acquisition will increase its cargo lifting from 4.7 cargoes in 2025 to 7.0 cargoes in 2026.Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor said the State Government will continue to pursue initiatives to strengthen Sabah’s energy sector. “We constantly seek investors to partner with us for sustainable and lasting benefits,” Hajiji said after witnessing the signing ceremony in Kuala Lumpur. “We constantly move forward to enhance revenue streams and supply reliability for Sabah. We seek to be a strategic player in Sabah’s oil and gas landscape.”

Datuk Seri Panglima Masidi Manjun - Deputy Chief Minister II/Minister of Finance, who is also Chairman of SMJ Energy Chairman - said that North Sabah is a strategic producing asset, and SMJE’s participation signals a maturing role for the state in upstream activities. “This move secures long-term value, builds commercial capability, and ensures more benefits flow directly to the people of Sabah,” Masidi said.

“Sabah continues to accelerate value creation through strategic partnerships, local participation, and responsible resource management.” PETRONAS and Sabah Energy Corporation (SEC) also signed the Heads of Agreement (HoA) for the Mutiara Cluster for the cluster’s development, targeted for the first quarter of 2029.