KUALA LUMPUR: Dialog Group Bhd has reached a final investment decision of US$235 million for the field development and abandonment plan for the Baram Junior Cluster Small Field Asset Production Sharing Contract (BJC SFA PSC).
In a filing with Bursa Malaysia Securities, the group said the plan, which was signed by Petroliam Nasional Bhd (Petronas), Dialog Resources Sdn Bhd and Petroleum Sarawak Exploration and Production (PSEP) on Jan 17, 2023, was approved by Petronas on Jan 8, 2025.
According to Dialog, the 14-year PSC comes with a two-year pre-development phase (including feasibility studies) that allows Dialog Resources and PSEP to finalise the field development plan and move into two-year development phase with first commercial production expected by the end of the phase.
The production phase will continue for the remaining 10 years or up to the expiry of the contract, whichever is earlier.
"The scope of the feasibility studies had encompassed 3D seismic data reprocessing, specialised studies, and resource assessment.
"Based on the outcome of the studies, the field development and abandonment plan were developed which determined the feasibility and commerciality of the asset," it noted.
Dialog said the participation in BJC SFA PSC is in line with its strategy to continue to expand and diversify across the upstream, midstream, downstream and renewable businesses of the energy sector, thereby increasing opportunities for synergies within the group.
The group noted that it will remain focused and steadfast in the pursuit of diversification across the energy sector to strategically position the group to weather different economic and oil price cycles, which is in line with its strategy of generating long term recurring income.
Dialog's participation in the BJC SFA PSC is for a duration of up to 14 years and the development project is to be executed to achieve first gas within two years.
It plans to fund the BJC SFA PSC through internal funds and/or external borrowings.
The proportions of the source of funds will be determined later after taking into consideration, among others, the internal cash requirements, gearing level of Dialog, interest rate and market conditions.
Dialog expects the BJC SFA PSC to contribute positively to the future earnings of the group.
At close today, Dialog's shares were down two sen or 1.08 per cent to RM1.84, giving it a market capitalisation of RM10.39 billion.