POSCO International Co., the trading unit of South Korean steelmaker POSCO, has signed a production sharing contract (PSC) for the development of an offshore gas field in Malaysia with Petronas Nasional Bhd (Petronas).
Under the deal, POSCO International and Petronas, the Malaysian state-run energy company, will have the right to first take part of crude oil and gas produced from the field to recover investment costs, the Korean company said on Monday.
POSCO International said in August it won an international bid to explore, develop and operate the 4,738 square kilometer natural gas field, known as the PM524 block, in waters 50-80 meters deep off the east coast of Malaysia.
POSCO International's Myanmar gas exploration project The Korean company owns an 80% stake in the project, while Petronas’ subsidiary Petronas Carigali Sdn Bhd. holds the remaining stake.
Under the agreement, POSCO International was guaranteed a four-year right to explore and operate the field and 24 years of development and production of resources from it.
POSCO International said it will assess the field by 2024 and start exploration drilling in 2025.
“With an aim to achieve carbon neutrality by 2050, the Malaysian government and Petronas are developing eco-friendly technology. We expect our partnership with Petronas to contribute to such an initiative by jointly promoting carbon capture and storage from gas fields and production of blue and green hydrogen,” said POSCO International Chief Executive Ju Si-bo.
POSCO International CEO Joo Si-bo The company has been actively pursuing oil and gas exploration projects in Southeast Asia.
