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Oil prospect off Malaysian Coast found dry

International Petroleum Corporation (IPC), a Toronto-listed petroleum company based in Canada was carrying out exploration on the Keruing prospect on Block PM307 off Malaysia. However, the exploration resulted in no luck when they found that the well turned out to be dry. They also found out that the well was plugged and abandoned. 

In its third-quarter report, IPC reported that although the exploration encountered a good quality reservoir, the well turned out to be water-bearing and hence exploration was stopped. 

Previously, two pilot holes were drilled near the Bertam field which yielded better than expected results in the A-15 area but poorer than expected results in the A-14 area.

IPC owns a 75% working interest in Block PM307 while Malaysia’s Petronas Carigali holds the remaining 25% equity. When IPC reported a fall in the third quarter profits, although there was a rise in revenue, the drilling results came to the front.

The US$131.4 million was offset by the rise in production costs in the recent quarter, about US$60.3 million. The unsuccessful venture in Malaysian waters also spiked costs in exploration, from US$163,000 to US$13.3 million, tying the failure of the prospect to the A-14 area in the Keruing block. 

Nicholson added that IPC’s full year average production guidance remained unchanged but was expected to be at the lower end of the 46,000 – 50,000 boepd. However, the company still expects to exit 2019 with output at about 50,000 boepd.

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