Malaysia’s Oil Riches Beckon: SK Earthon Secures Second Oilfield Exploration Bid in the Country
SK Earthon Accelerates Global Energy Conquest with New Malaysian Oil Field
SK Earthon Co., the energy resource exploration and production (E&P) unit of South Korean energy giant SK Innovation Co., has secured a new E&P opportunity in Malaysia, marking its second oil field exploration bid win in the Southeast Asian country.
SK Innovation announced that SK Earthon has won the rights to explore and operate the Ketapu Cluster, an oil field located off the coast of the Sarawak region, from the Malaysian government and signed a production sharing contract with state energy giant Petronas.
SK Earthon will own an 85% stake in the Ketapu Cluster as operator, while Petroleum Sarawak Exploration and Production (PSEP), Malaysia’s state-run oil and gas exploration company, will hold the remaining 15%.
The Korean energy resources E&P company anticipates that it will begin producing crude oil and natural gas from the Ketapu Cluster in 2031 after conducting exploration and appraisal of the cluster to determine its commercial viability.
The two blocks are said to be more abundant in oil than an oil field in the South China Sea, from which SK Earthon began producing crude oil in September last year. Block 17/03 located in the eastern South China Sea is expected to produce approximately 50 million barrels of crude oil.
SK Innovation’s Energy E&P Business
With the additional oilfield, SK Earthon’s contribution to its parent SK Innovation’s earnings is expected to increase further. SK Innovation’s energy E&P business earned 296.5 billion won ($221.4 million) in operating profit in the first six months of this year, already reaching 80% of last year’s profit.
The 17/03 block in the South China Sea is SK Earthon’s first oil field that it has successfully explored and produced with its proprietary technology. In November last year, it also found crude oil in an offshore block south-east of Vietnam after four years of exploration.
SK Earthon’s Global Expansion
A series of exploration projects and latest discoveries are expected to help SK Earthon solidify its footing as a major E&P energy resources company in China and Southeast Asia. It first entered the energy resource exploration, development and production industry in 1983 and now produces approximately 57,000 barrels of crude oil and natural gas per day on average from 10 oil blocks and three liquefied natural gas (LNG) projects in eight countries.
Sustainability Efforts
SK Earthon is also accelerating efforts to improve an environmentally friendly energy portfolio to reduce carbon emissions. In 2021, the company pledged to increase green energy products to 70% of its entire business portfolio by 2025 from 30% to reduce its carbon footprint and create new sustainable business opportunities.
As part of the plan, it is actively involved in explorations of carbon dioxide storage sites from offshore basins to nurture its carbon capture and storage (CCS) business. Last month, SK Earthon was granted a license to jointly explore a carbon dioxide storage field in Block G-15-AP off the coast of Western Australia.