KUALA LUMPUR (Jan 17): Dialog Group Bhd’s unit signed the Baram Junior Cluster Small Field Asset production sharing contract (PSC) on Tuesday (Jan 17), with Petroliam Nasional Bhd (Petronas) and a unit of Sarawak state-owned Petroleum Sarawak Bhd (Petros).

Dialog’s wholly-owned unit Dialog Resources Sdn Bhd will take up a 70% participating interest in the PSC, including the operatorship of the contract, while Petros’s wholly-owned subsidiary Petroleum Sarawak Exploration and Production will take up the remaining 30% stake.
 
The PSC spans 14 years, including a two-year pre-development phase and two-year development phase. The production phase will continue for the remaining 10 years or up to the expiry of the contract, whichever is earlier, said Dialog in a stock exchange filing.

Dialog said the PSC also includes feasibility studies during the pre-development phase, whose scope will encompass 3D seismic data reprocessing, specialised studies, and resource assessment.

“Based on the outcome of the studies, a field development and abandonment plan will be developed to determine the feasibility and commerciality of the asset,” it said.

Dialog said it will make subsequent announcements once a field development and abandonment plan has achieved a final investment decision.
 
The group said its participation in the PSC is in line with its strategy to continue to expand and diversify across the upstream, midstream, downstream and renewable businesses of the energy sector, thereby increasing opportunities for synergies within the group.

“Dialog will remain focused and steadfast in the pursuit of diversification across the energy sector to strategically position the group to weather different economic and oil price cycles, which is in line with the group’s strategy of generating long-term recurring income,” it said.

The group said its strategy is to grow upstream assets and to continue to develop upstream capabilities in oil and gas activities, which include new field development, rejuvenation, and redevelopment of mature oil and gas fields.

“This is expected to create a robust platform for generating long-term sustainable revenue from oil and gas production,” it said.
 
“The increased upstream activities will provide further opportunities for Dialog to participate in the provision of services in the value chain of the field development cycle.

“The strengthening of the upstream capabilities will lead to an increase in Dialog’s sources of sustainable and recurring income in future, and reinforces Dialog’s position as a leading integrated technical services provider,” it added.

Shares of Dialog closed five sen or 2.0% higher at RM2.58 on Tuesday, giving the group a market capitalisation of RM14.57 billion.