Sabah Acquires Stakes in North Sabah Oil Fields

State-owned SMJ Energy's (SMJE) is acquiring a 20 percent non-operating participating interest in the North Sabah Enhanced Oil Recovery Production Sharing Contract (EOR PSC). With the acquisition, the Samarang and North Sabah assets are now part of SMJE portfolio, and the assets will produce seven crude oil cargoes annually. The North Sabah EOR PSC covers four oil fields, located off Kota Belud. PETRONAS Carigali Sdn Bhd (PCSB) retains a 30 percent stake, and SEA-Hibiscus Sdn Bhd continues as the operator with a 50 percent interest.

"The acquisition reflects our long-term strategy to build real value from our resources, through collaboration between the State Government and PETRONAS under the Commercial Collaboration Agreement (CCA) signed in December 2021,” Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor said on 28 November 2025.

"We're not just increasing ownership, we're securing Sabah's rightful share in its energy future.” SMJE plans more equity participation with Petronas and bigger share in oil and gas resources in Sabah to solidify the state's growing venture in the upstream energy landscape, Hajiji added. In October 2025 Sabah’s SMJ Energy Sdn Bhd and PETRONAS LNG Sdn Bhd signed an agreement for Sabah to own 25 per cent equity in PETRONAS PFLNG 3 Sdn Bhd (also known as ZLNG).

SMJ Energy Sdn Bhd’s diversified portfolio now includes full ownership of :
• Sabah International Petroleum Sdn Bhd (SIP), which operates both FPSO and FSO assets;
• 50 per cent participating interest in the Samarang Production Sharing Contract;
• 10 per cent equity interest in PETRONAS LNG 9 Sdn Bhd;
• 25 per cent equity interest in PETRONAS Chemicals Fertiliser Sabah Sdn Bhd (SAMUR petrochemical plant);
• and free carry and back-in rights in exploration blocks SB409 (20%), SB403 (20%), SB306A (15%), and SB306B (15%). PETRONAS PFLNG 3 is presently developing the USD3

1 billion nearshore floating liquefied natural gas (FLNG) at the Sipitang Oil & Gas Industrial Park (SOGIP) which has a production capacity of 2 million tonnes per annum (2.0 MTPA). The facility will commence by 2027. Sabah’s participation in ZLNG is part of the State’s strategic plan to further diversify and strengthen its portfolio in the upstream, LNG, and petrochemical sectors to generate long-term, stable cash flows from high-quality, cash-generating assets.

Sabah's downstream trajectory is also progressing rapidly. Sabah Energy Corporation (SEC), the state's gas aggregator and distributor, is supplying gas to E-Steel's RM31 billion green steel plant at the Sipitang Oil and Gas Industrial Park (SOGIP), a key investment supporting Sabah's move toward industrial diversification. Phase 1 (RM6.4 billion) of Esteel Enterprise Sabah Sdn Bhd’s project was launched in May 2025. Esteel Enterprise Sabah Sdn Bhd (Esteel Sabah) is a subsidiary of Singapore’s Green Esteel Pte Ltd. The ongoing O&G and energy industrial transformative projects will create tremendous economic spin offs in Sipitang, in particular, and in Sabah, in general, from green technology innovation to job creation and overall development.