KUALA LUMPUR (Jan 9): Dialog Group Bhd (KL:DIALOG) announced on Thursday that it has secured the final investment decision for the field development and abandonment plan (FDAP) under the Baram Junior Cluster Small Field Asset Production Sharing Contract (PSC), amounting to US$235 million (RM1.02 billion).
The PSC agreement signed in January 2023 involves Dialog Resources Sdn Bhd — a wholly owned subsidiary of Dialog Group — holding a 70% participating interest, while Petroleum Sarawak Exploration and Production Sdn Bhd (PSEP), a subsidiary of the Sarawak government, holds the remaining 30% in the PSC.
In a filing with Bursa Malaysia, Dialog confirmed that the FDAP was approved by Petronas on Wednesday.
The PSC spans a 14-year duration, comprising a two-year pre-development phase, a two-year development phase, and a production phase lasting 10 years or until the contract expires, whichever comes first.
The project aims to achieve first gas production within two years, it said.
Dialog said that the PSC will be financed through a combination of internally generated funds and/or external borrowings. The exact proportions will be determined based on factors such as internal cash requirements, Dialog’s gearing levels, interest rates, and prevailing market conditions.
The group said its participation in the PSC aligns with its long-term strategy to diversify and expand across the upstream, midstream, downstream, and renewable energy sectors.
This strategic move is expected to create synergies within Dialog’s operations and enhance its overall growth potential, it added.
“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 added.
Shares of Dialog closed down two sen or 1.08% at RM1.84 on Thursday, valuing the group at RM10.5 billion.