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New Straits Times
5 days ago
- Business
- New Straits Times
Sabah rises as FDI hotspot for O&G sector
KUALA LUMPUR: Sabah is fast becoming a leading destination for foreign direct investment (FDI) in Malaysia's oil and gas (O&G) sector. This is driven by renewed investor confidence and a collaborative framework with national oil company Petroliam Nasional Bhd (Petronas). SMJ Energy chief executive officer Dionysia Kibat said major global O&G firms have intensified upstream activities across the state's hydrocarbon-rich basins, reaffirming investor confidence in Sabah's regulatory and commercial environment. "Major international O&G companies are committing towards further exploration, development and production in the state," FMT quoted her as saying in an interview. "This includes ConocoPhillips, Pertamina, INPEX Malaysia and TotalEnergies, with operations spanning offshore basins on both the east and west coasts of Sabah," she added. Kibat also said Shell Malaysia and ConocoPhillips have extended their respective production-sharing contracts (PSCs) to 2050, while PTTEP Malaysia is ramping up deepwater redevelopment in Blocks H and Kikeh. "These partnerships have already translated into tangible fiscal gains for Sabah. About 50 per cent of the state's RM6.7 billion revenue is derived from oil and gas activities, mainly through cash payments and state sales tax (SST)," she said. Collaborative model vs legal disputes Kibat credited the surge in investment and revenue to the state's decision to engage constructively with Petronas, in contrast to a more legalistic approach taken by other states. The collaborative partnership has so far demonstrated commercial and financial success for Sabah, she said. The framework stems from a commercial collaboration agreement (CCA) signed in 2021 between Petronas and the Sabah government under chief minister Datuk Seri Hajiji Noor's administration. The agreement gives the state a greater say and participation in O&G development while remaining aligned with federal laws such as the Petroleum Development Act 1974. SMJ Energy, a wholly-owned entity of the Sabah government established in 2021, has been tasked with overseeing, managing and coordinating the state's participation across the entire O&G value chain. "The CCA provides a commercial solution to overcoming the issue of O&G rights in Sabah while preserving the existing legal rights and privileges belonging to the state and federal governments," said Dionysia. Growing portfolio Under the CCA, SMJ Energy has acquired equity in several key ventures, including a 50 per cent stake in the Samarang production-sharing contract, a 25 per cent stake in Petronas Chemicals Fertiliser Sabah and a 10 per cent stake in a Petronas LNG plant in Bintulu. These investments have collectively generated billions in revenue, with the Samarang stake alone contributing RM1.8 billion, followed by RM323 million from the fertiliser company and RM866 million from the LNG plant. "Dividends from SMJ, amounting to RM160 million to date, have been channelled back to the state government. "SST paid to the state by SMJ Energy amounts to RM91 million to date," she said. Surging OGSE sector Sabah's oil and gas services and equipment (OGSE) segment is also seeing significant growth under the CCA structure. For the first quarter of 2025 alone, OGSE contracts worth RM582 million had been awarded to Sabah-based contractors. This was close to the total value for the entire year of 2021. In 2024, Sabah OGSE firms secured RM2 billion worth of work. "This demonstrates Sabah's emergence as an OGSE powerhouse for the future," Kibat said. To support downstream development, SMJ Energy is working with Petronas to ensure sufficient local gas supply for major industrial investments. These include a RM20 billion hot briquetted iron (HBI) plant by E-Steel Enterprise Sdn Bhd in Sipitang and Phase 2 of the SBH Kibing New Solar Energy Sdn Bhd solar glass plant, valued at RM7.2 billion. Conservative but strategic approach Kibat said SMJ Energy adopts a conservative investment posture, focusing on producing assets and avoiding upstream exploration risk. "We work within our limitations and financial resources. SMJ Energy will do away with exploration risk and will not assume an operational role in its upstream investments for now," she said. Instead, the company capitalises on "free carry interests" and "contractual back-in rights", mechanisms that allow for equity participation without upfront capital. In addition, she said deeper collaboration with Petronas remains on the table, with ongoing high-level discussions between state and federal governments under the Malaysia Agreement 1963 committees. "These relate to oil royalties, cash payments and the continental shelf which involve both existing state and federal legislation," she added.
Free Malaysia Today
31-07-2025
- Business
- Free Malaysia Today
Sabah sees O&G windfall as foreign giants commit long-term
SMJ Energy CEO Dionysia Kibat attributes sustained investor confidence in Sabah's oil and gas sector to its collaborative engagement with Petronas. (AFP pic) PETALING JAYA : Sabah is drawing robust foreign direct investment (FDI) into its oil and gas (O&G) sector, bolstering state revenue and driving local economic growth—underpinned by a strategic collaboration with Petronas. Dionysia Kibat, CEO of SMJ Energy, said leading industry players are intensifying their activities across Sabah's resource-rich basins. 'Major international O&G companies are committing towards further exploration, development and production in the state,' she told FMT in an exclusive interview, adding that the state now leads the rest of the country in near-term FDI inflows. Among them, ConocoPhillips and Pertamina are active in the Layang-Layang basin, while INPEX Malaysia and TotalEnergies hold stakes in exploration blocks off the east and west coasts. Dionysia Kibat. Meanwhile, Shell Malaysia and ConocoPhillips have extended their production-sharing contracts (PSCs) to 2050, while PTTEP Malaysia is ramping up deepwater redevelopment in Blocks H and Kikeh. Dionysia said these partnerships are already providing a substantial boost to state coffers. 'Approximately half of the state government's revenue of RM6.7 billion is derived from oil and gas activities in the form of cash payment and SST.' She attributed the sustained investor confidence to Sabah's collaborative engagement with Petronas, contrasting it with Sarawak's legalistic and litigious stance. 'To date, this collaborative partnership has demonstrated commercial and financial success for Sabah,' said Dionysia. In 2021, Sabah chief minister Hajiji Noor's administration signed a commercial collaboration agreement (CCA) with Petronas, allowing the state greater say, revenue and participation in the O&G industry while respecting national laws, including the Petroleum Development Act 1974. SMJ Energy, a wholly-owned entity of the Sabah government established in 2021, has been tasked with overseeing, managing, and coordinating the state's participation across the entire O&G value chain. 'The CCA provides a commercial solution to overcoming the issue of O&G rights in Sabah while preserving the existing legal rights and privileges belonging to the state and federal governments,' said Dionysia. Through the CCA, SMJ Energy has acquired equity in multiple ventures: a 50% stake in the Samarang PSC, 25% in Petronas Chemicals Fertiliser Sabah, and 10% in a Petronas LNG plant in Bintulu. These have yielded RM1.8 billion, RM323 million, and RM866 million respectively in dividends and revenue. 'Dividends from SMJ—amounting to RM160 million to date—have been channelled back to the state government. 'SST paid to the state by SMJ Energy amounts to RM91 million to date,' she said. Sabah's contractors ride OGSE wave Sabah's oil and gas service and equipment (OGSE) industry is also seeing marked growth under the CCA framework. 'For Q1 of 2025, the value of OGSE work already awarded to Sabah contractors amounted to RM582 million, compared to RM613 million for the whole of 2021,' Dionysia noted. 'In 2024 alone, Sabah OGSE contractors were awarded RM2 billion worth of work, demonstrating Sabah as a OGSE powerhouse for the future.' SMJ is also working with Petronas to ensure adequate local gas supply to spur downstream industrialisation. 'We're jointly ensuring the availability of gas supply for a RM20 billion investment (in three phases) by E-Steel Enterprise Sdn Bhd to build a hot briquetted iron plant in Sipitang Oil and Gas Industrial Park, and Phase 2 of the SBH Kibing New Solar Energy SB's solar glass plant amounting to RM7.2 billion,' she said. Investing smart sans risk Asked about SMJ's strategic posture, Dionysia said the company would remain a financial investor in producing assets with strong cash flow. 'We work within our limitations and financial resources. SMJ Energy will do away with exploration risk and will not assume an operational role in its upstream investments for now.' She said SMJ leverages 'free carry interests' and 'contractual back-in rights'—mechanisms that allow it equity participation without initial capital exposure. A deeper partnership with Petronas is not ruled out, she added. 'There are ongoing discussions at the highest level between the state and federal governments under the MA63 committees,' said Dionysia. 'These relate to oil royalties, cash payments and the continental shelf which involve both existing state and federal legislation.'
Borneo Post
17-07-2025
- Business
- Borneo Post
Sabah to acquire 25 per cent equity in Petronas ZNLG facility
Hajiji, together with Petronas Group President and Chief Executive Officer, Tan Sri Tengku Muhammad Taufik, witnessing the exchange of documents between Petronas LNG Sdn Bhd (represented by Vice President, LNG Marketing & Trading – Petronas Gas & Maritime, Shamsairi Mohd Ibrahim) and SMJ Energy Sdn Bhd (Datuk Dr Dionysia Kibat) at the signing ceremony of the Heads of Agreement at the Malaysian Petroleum Club (MPC) in Kuala Lumpur on Thursday. KUALA LUMPUR (July 17): The Sabah Government, through SMJ Energy (SMJE) will be acquiring 25 per cent equity in the USD3.1 billion nearshore floating liquefied natural gas (ZLNG) facility in Sipitang following the signing of the Head of Agreement (HOA) with Petronas at the Malaysian Petroleum Club (MPC) here on Thursday. 'This partnership marks another significant milestone to ensure Sabah's long-term development goals, promoting industrial growth and energy security and creating new opportunities to drive Sabah's progress. 'Through strategic investments like ZLNG, we will strengthen the state's economic resilience while ensuring that the benefits of Sabah's natural resources directly contribute to the well-being of our people,' said Chief Minister Datuk Seri Panglima Hajiji Noor after witnessing the HOA signing. The ZLNG facility with a capacity of two million tonnes per annum (MTPA) represents a significant addition to Malaysia's LNG landscape. Positioned nearshore in Sipitang, ZLNG is currently under construction and is expected to commence operations in the second half of 2027. This project complements Sabah's growing LNG footprint, in addition to two other floating LNG facilities, PFLNG1 (1.2 MTPA) and PFLNG2 (1.5 MTPA), currently operating in Sabah waters. The State Government also announced its intention to acquire a 40 per cent participating interest in PFLNG1 through SMJ Energy, with due diligence targeted to begin in the second half of 2025. SMJ Energy's growth trajectory since the signing of the Commercial Collaboration Agreement (CCA) with Petronas in December 2021 has been rapid. The company now holds 50 per cent equity in the Samarang PSC oil production asset, 10 per cent equity in LNG9, 25 per cent equity in the SAMUR petrochemical complex and full ownership of Sabah International Petroleum (SIP), which operates both FPSO and FSO assets. SMJ Energy also holds free carry and back-in rights in exploration blocks SB409 (20%), SB403 (20%), SB306A (15%) and SB306B (15%) 'We are a prudent financial investor with a disciplined approach to portfolio building. Our entry into ZLNG is part of our strategic plan to further diversify and strengthen our position in the upstream, LNG, and petrochemical sectors. 'This opportunity aligns with our mandate to generate long-term, stable cash flows from high-quality, cash-generating assets,' said SMJ Energy Chief Executive Officer Datuk Dr Dionysia Kibat. Sabah's downstream ambitions are also advancing rapidly. Sabah Energy Corporation (SEC), the state's gas aggregator and distributor, plays a crucial role in ensuring a stable domestic gas supply for Sabah's industries. One of its landmark projects includes supplying gas to E-Steel's RM31 billion green steel plant at the Sipitang Oil and Gas Industrial Park (SOGIP), a key investment supporting Sabah's move toward industrial diversification. Also present at the signing ceremony were Sabah Finance Minister an SMJE chairman Datuk Seri Masidi Manjun, State Secretary Datuk Seri Safar Untung and State Attorney General Datuk Brenndon Soh.
The Star
17-07-2025
- Business
- The Star
Sabah secures 25% stake ZLNG facility with PETRONAS
KOTA KINABALU: Sabah acquires 25% equity in the USD3.1bil (RM13.17bil) nearshore floating liquefied natural gas (ZLNG) facility in Sipitang with the signing of the Head of Agreement (HOA) with PETRONAS at the Malaysia Petroleum Club (MPC), in Kuala Lumpur on Thursday (July 17). Chief Minister Datuk Seri Hajiji Noor stated that the partnership ensures Sabah's long-term development goals. "Through strategic investments like ZLNG, we will strengthen the state's economic resilience while ensuring that the benefits of Sabah's natural resources directly contribute to the well-being of our people," he said after witnessing the HOA signing. The ZLNG facility has a capacity of 2 million tonnes per annum (MTPA). It was under construction in Sipitang and was expected to commence operations in the second half of 2027. The State Government also announced its intention to acquire a 40% participating interest in PFLNG1 through SMJ Energy. SMJ Energy Chief Executive Officer Datuk Dr Dionysia Kibat said they are a prudent financial investor with a disciplined approach to portfolio building. 'Our entry into ZLNG is part of our strategic plan to diversify further and strengthen our position in the upstream, LNG, and petrochemical sectors,' she said.
Sinar Daily
30-06-2025
- Politics
- Sinar Daily
Sinar Harian wins main prize at Kinabalu Press Awards 2025
The award-winning report shed light on the daily struggle of villagers especially schoolchildren who had to traverse muddy roads despite repeated promises of infrastructure improvement during the 2022 General Election. Sinar Harian journalist Norasikin Daineh won the main award for the Malay Language News Report (non-feature) category at the Kinabalu Press Awards 2025 held on Sunday night. KOTA KINABALU - Sinar Harian journalist Norasikin Daineh, took home the top prize for the Malay Language News Report (non-feature) category at the Kinabalu Press Awards (KPA) 2025 held on Sunday night. She won a RM2,500 cash prize and a certificate for her impactful series "Jalan Magandai." The award-winning report shed light on the daily struggle of villagers especially schoolchildren who had to traverse muddy roads despite repeated promises of infrastructure improvement during the 2022 General Election (GE). SMJ Energy Sdn Bhd CEO Datuk Dr Dionysia Kibat. (second from left) presenting the main prize to Sinar Harian journalist Norasikin Daineh (second from right), for the Malay Language News Report (non-feature) category at the Kinabalu Press Awards 2025 in Kota Kinabalu, Sabah. The prize was presented by SMJ Energy Sdn Bhd chief executive officer Datuk Dr Dionysia Kibat. In a speech by Chief Minister Datuk Seri Hajiji Noor which was delivered by State Assistant Minister of Tourism, Culture and Environment Datuk Joniston Bangkuai, the former urged journalists to practise their craft with integrity and professionalism. "The success and dissemination of government policies rely on the media's ability to deliver clear and effective information to the people. "As an entity closely connected with the government, the media also plays a role in conveying information related to the state's development policies," he said. He added that the government remained fully committed to initiatives that would benefit the people and accelerate the development of Sabah through the Sabah Maju Jaya Development Plan. He also stressed the importance of strategic cooperation and strengthened relationships between media and the state, especially in delivering accurate development-related information to the public. "Media reports help the government understand what is happening on the ground and hear the concerns of the people. "Certainly, the government always welcomes such reporting as it acts as a bridge between the government and the people," he said. The Chief Minister also acknowledged the need for a reliable and ethical media to serve as a platform for fast and accurate information dissemination. He praised the KPA, organised by the Sabah Journalists Association (SJA) with support from the state and other sponsors, as a way to recognise and inspire excellence in journalism. "This ceremony serves as a platform to motivate media practitioners to remain driven, focused and responsible in producing ethical and transparent work. The state government values and understands this need. In fact, sponsorship support increases every year. "I congratulate all the winners. Continue your excellent work and let this achievement be a catalyst to further contribute to the state's development and the people's welfare through credible and ethical news reporting," he said. Meanwhile, SJA president Mariah Doksil shared that 268 entries were submitted this year and evaluated by experienced jurors from the Malaysian Press Institute (MPI). "Tonight, we not only recognise last year's outstanding work but also celebrate the spirit of journalism. "We often deliver the stories of others—struggles, hopes, achievements and change. But behind every byline, photo credit and recording, as storytellers, we have our own journeys too. "I want to pay tribute to all of you who continue to report the truth, capture moments with care and write based on journalistic ethics," she said. More Like This
