KOTA KINABALU: Sabah has extended the ongoing sales and purchase agreement (SPA) with Shell International Eastern Trading Company (SIETCO) for another three years, starting next month.
The SPA extension covers Sabah's crude oil cargo at the Labuan Crude Oil Terminal (LCOT), derived from its 50 per cent interest in the Samarang PSC.
The long-term collaboration was marked by a signing ceremony for the SPA extension between Sabah State wholly-owned SMJ Energy Sdn Bhd (SMJE) and SIETCO at the Sabah International Convention Centre in Kota Kinabalu.
The event was attended by Sabah Finance Minister Datuk Seri Masidi Manjun, along with representatives from SMJE, SIETCO, and Shell Malaysia.
"The SPA extension is significant as it represents a major part of SMJE's continuous revenue generation initiative going forward.
"To illustrate the significance of this extension, SMJE has achieved a revenue of just under RM580 million through the sale of four cargoes of crude oil alone, to date.
"This is a major milestone for SMJE, which has been an upstream oil and gas production sharing contract (PSC) company since May 2023," according to a statement by SMJE.
The state continues to benefit from its entry into the oil and gas sector in Sabah through the signing of the commercial collaboration agreement (CCA) with Petronas on Dec 7, 2021.
The CCA gives the state greater revenue sharing, a greater say, and greater participation in the oil and gas value chain in Sabah.
Masidi, who is also SMJE chairman, added that the company would continue its prudent strategic acquisition strategy, focusing predominantly on profitable oil and gas-producing assets.