BC Petroleum (BCP) has ceased operation and has agreed with Petronas to terminate its small field risk service contract (SFRSC) as of December 1, 2015 – some 11 years ahead of when the agreement was due to terminate.
BCP’s shareholders are ROC Oil (48%), Petronas Carigali (20%) and Dialog Group (32%), which today said the closure was due to “the difficult business environment and persistent depressed oil price”.
The 15-year SFRSC was signed with the Malaysian state energy company in August 2011 and covered the development and production of petroleum from the Balai Cluster Fields, located in offshore Bintulu, Sarawak, Malaysia.
The contract‘s development and pre-development phases were estimated to cost between $850m and $950m at the time.
Petronas held the role of project owner in the arrangement and BCP was its service provider, who Petronas reimbursed for its operational costs plus remuneration for the services rendered.
BCP’s remuneration began from first oil at the Balai field in the Balai Cluster Fields on November 6, 2013. Oil production commenced at a second field, Bentara, on May 25, 2014 but since then there have been no further developments in the area.
Now the SFRSC has been terminated, BC Petroleum will receive the balance of its capital expenditure reimbursement within the first half of 2016, which will incur a $10m loss for Dialog Group, the company said. The other JV partners’ losses were not disclosed.
