KOTA KINABALU: SMJ Energy Sdn Bhd today clarified that it has no equity stake in the SB403 Production Sharing Contract (PSC) the oil and gas exploration contract which has raised environment watchdog, RimbaWatch, concerns.
In a statement, the Sabah-owned company said that it is not a party to the PSC but instead has a "back-in right" in the future in the event of exploration success.
The'back-in right' allows it to decide whether to join as a partner in the future in the event of exploration success taking into account commercial, technical, environmental and other factors.
"SMJ Energy acts as a prudent financial investor and works with reputable oil and gas companies with proven ESG (Environmental, Social & Governance) track records," it said.
SMJ Energy was responding to concerns raised by RimbaWatch about the oil and gas exploration activities planned within the Tun Mustapha Marine Park (TMP) in Sabah.
In a statement today, RimbaWatch said the exploration of block SB-403 overlaps entirely with the TMP's boundaries, posing risks to biodiversity and the livelihoods of local communities.
The TMP covers 900,000 hectares and was established in 2016 as a Category VI protected area by the International Union for Conservation of Nature.