HANOI (April 9): Hibiscus Petroleum Bhd on Wednesday announced that its PM3 Commercial Arrangement Area (CAA) production sharing contract (PSC) offshore northeast Malaysia has been extended for 20 years.

The extension pushes the PSC’s expiry from end-December 2027 to end-December 2047, according to the upstream oil and gas firm’s statement on Wednesday.

Hibiscus’ indirect wholly-owned units Hibiscus Oil & Gas Malaysia Ltd (HML) and Hibiscus Oil & Gas Malaysia (PM3) Ltd (HML PM3) inked a key principles agreement with Petronas via Malaysia Petroleum Management, and Vietnam Oil and Gas Group for the extension of the PM3 CAA PSC and Upstream Gas Sales Agreement (UGSA).

The contract extension will maintain production from existing fields, support the development of discovered fields and allow further exploration in the Malaysia-Vietnam offshore area, increasing the company's reserves and resources.

Hibiscus noted that the extension carried enhanced terms for the PSC and UGSA, but did not elaborate.

HML will continue as operator of PM3 CAA PSC with a 35% stake, while PetroVietnam Exploration Production Corp Ltd will hold 30% and Petronas Carigali Sdn Bhd the remaining 35%.

The asset was acquired via Hibiscus’ acquisition of Fortuna International Petroleum Corp from Repsol back in 2022 for US$212.5 million.

The PSC, when acquired, was licensed to run from 2018 to 2027.

The 2022 acquisition was based on the valuation and consideration up to the previous PSC’s tenure of end-December 2027. 

The 20-year extension, at zero consideration, will unlock the residual value of the asset and add more proven and probable reserves and contingent resources to its asset portfolio, according to Hibiscus.

Shares in Hibiscus ended two sen or 1.4% higher at RM1.45 on Wednesday, valuing the group at RM1.13 billion.