KUALA LUMPUR, May 22 — Uzma Bhd’s unit, Uzma Energy Ventures (Sarawak) Sdn Bhd and EQ Petroleum Developments Malaysia Sdn Bhd (EnQuest), has exercised its right for mutual termination of the Tanjong Baram small field risk service contract (SFRSC) with Petroliam Nasional Bhd (Petronas), following occurrence of ‘economic cut-off’ in accordance with the terms of the risk service contract (RSC).

Uzma, in a filing with Bursa Malaysia, said with the termination of the SFRSC, Petronas will reimburse the balance of the reimbursable capital and operational expenditures to Uzma and EnQuest over the following nine months.

Petronas had awarded the fifth RSC to Uzma and EnQuest on March 27, 2014 for the development and production of the Tanjong Baram field, located six kilometres off Sarawak.

Uzma had a 30 per cent stake in the Tanjong Baram RSC in a partnership with EnQuest, which owned the remaining 70 per cent interest in the project, was the lead operator.

The contract’s objective was to develop and produce petroleum from the Tanjong Baram field.

The Tanjong Baram SFRSC was signed six years ago when oil price was about US$90 per barrel and the opportunity was given by Petronas for local service companies to participate in field development and operations.

The field consisted of an unmanned lightweight platform with production tied to Petronas Carigali Sdn Bhd’s West Lutong Platform via a flexible production pipeline.

Tanjong Baram field achieved first oil in August 2015.

Uzma Bhd managing director and group chief executive officer Datuk Kamarul Redzuan Muhamed said together with EnQuest, they have managed to operate the facilities safely since 2014.

"Through the implementation of innovative technologies and cost-effective operations, we were able to sustain the production of this small field for four years despite the low oil price,” Kamarul Redzuan said, adding that both parties appreciate Petronas for giving them the opportunity to demonstrate their capabilities throughout the contract.

The discontinuance/termination of the contract will not have any significant effect on the earnings and net assets of the company for the financial year ending June 30, 2020 and onwards. — Bernama