Exxon Mobil Corporation (ticker: XOM, exchange: New York Stock Exchange (.N))
News Release -
ExxonMobil Invests in Southeast Asia's Energy Needs as Third New Malaysian Project Comes OnstreamIRVING, Texas, Feb 5, 2002 (BUSINESS WIRE) -- Exxon Mobil Corporation
(NYSE:XOM) announced today that oil production has commenced from the Larut
field, the third new offshore Malaysia platform to come onstream in the past two
Production from the ExxonMobil-operated Larut field and the Satellite Fields
Development (SFD) project, as well as the PETRONAS Carigali Sdn Bhd
(PCSB)-operated Angsi facilities, will help maintain Malaysia's projected oil
production requirements, and add to the country's ability to meet growing gas
demand. Production from the three developments is expected to total more than
320 million barrels of oil and 1.5 trillion cubic feet of gas over the next 25
years. The total development costs for all three projects, including drilling
costs, are estimated at US$1.7 billion.
Larut is the first field to be developed in block PM5, 125 miles offshore of
Terengganu, Malaysia, in the South China Sea, and at its peak is expected to
produce over 30,000 barrels of oil per day (kbd) and 35 million cubic feet of
gas per day (mcfd). Expected peak production from the three new facilities is
expected to total almost 140 kbd and 535 mcfd.
"ExxonMobil and Petroliam Nasional Berhad (PETRONAS), Malaysia's national oil
company, have worked together to hold oil production levels steady by maximizing
the output from existing fields and finding economic ways to develop the
smaller, more technically challenging fields," said Mr. Terry Koonce, President,
ExxonMobil Production Company.
He added that both Larut and SFD project had been considered economically
marginal until the company developed innovative facility designs and project
development plans that resulted in significant cost savings. "These types of
developments are part of our commitment to use the company's technological
expertise to extend the economic life of existing reserves by applying
world-class practices and efficiencies."
One of the most satisfying aspects of the Larut development is that it was the
safest project in ExxonMobil's history in Malaysia. Over 4.6 million workhours
were completed over a four year period without a single employee or contractor
Lost Time Injury. This is a remarkable achievement and a testimony to our focus
on safety performance in all areas where the company operates.
ExxonMobil Exploration and Production Malaysia Inc. (EMEPMI), a subsidiary of
Exxon Mobil Corporation, as operator, is developing Larut with co-venturer PCSB
under a 50:50 Production Sharing Contract with PETRONAS. EMEPMI is also the
operator for the SFD project, being developed on behalf of its joint venture
with PCSB. Under the various Production Sharing Contracts, EMEPMI has a working
interest of between 78 percent and 80 percent in the SFD fields, with the
remaining interest being held by PCSB. Angsi, is being developed jointly by
50:50 co-venturers PCSB, as operator, and EMEPMI.
ExxonMobil is the largest oil producer in Malaysia, with current operated oil
production of approximately 280 kbd, nearly 50 percent of the nation's total.
ExxonMobil also produces 1.4 billion cubic feet per day of gas, which supplies
around 70 percent of Peninsular Malaysia's gas requirements.
BACKGROUND ON NEW OFFSHORE MALAYSIA PROJECTS
Operated by EMEPMI, Larut is an eight-legged steel jacket platform with a 36
well capacity. Oil and gas will flow from Larut into the existing Tapis oil and
gas system via approximately 125 miles of new pipelines. The development
requirements of the reservoir, and remoteness of the field, added a higher than
usual complexity to its development.
To ensure the viability of this project, ExxonMobil worked closely with
co-venturer PCSB to identify cost and schedule enhancements, including
coordinated procurement of some of the Larut facilities with those of the Angsi
development. The fabrication and installation of Larut was completed on schedule
and within budget, despite tight design and construction deadlines.
Operated by PCSB, the Angsi complex is the largest integrated oil and gas
facility in Malaysia, and was completed ahead of schedule and under budget. It
consists of a central processing platform connected by a bridge to a 52 well
drilling platform and a second satellite platform with a 32 well capacity. First
production from the Angsi field, located 100 miles offshore of Terengganu,
Malaysia in the South China Sea, was achieved on December 22, 2001.
Over 190 miles of pipelines were installed as part of the development of the
Angsi complex, including connections to existing production facilities at
Guntong D, Seligi A, Tapis and a new 105 mile-long pipeline to shore. Angsi
serves as a new hub for transporting gas to shore, thereby enhancing supply
reliability and security for Malaysia. An additional phase of development, to
further maximize resource recovery in the Angsi field area, is currently under
SATELLITE FIELDS DEVELOPMENT (SFD)
Operated by EMEPMI, Seligi H, the first of five platforms to be installed under
the SFD project began production on December 11, 2001, ahead of schedule and
under budget. This project, the first of its kind in Malaysia, represents a
significant step forward in the development of small oil and gas fields. With
smaller reserves, the new approach was the enabling factor in making production
from these fields economic. By simultaneously constructing these satellite
platforms, sequentially installing them, and then using the same drilling rig,
the company was able to capitalize on time efficiencies and economies of scale.
Seligi H was installed 150 miles offshore Terengganu, Malaysia, in the South
China Sea in August 2001 following construction in Johor, Malaysia with four
other satellite platforms: Raya B, Lawang A, Serudon A and Irong Barat B. After
completion of ten wells on Seligi H, the jack-up drilling rig will move
progressively to the other platforms and drill a total of 31 wells. Production
will be brought onstream in stages between the second quarter of 2002 and early
CAUTIONARY STATEMENT: Expectations, estimates, and business plans in this
release are forward-looking statements. Actual future results, including
production rates and volumes as well as project costs and dates, could differ
materially due to changes in market conditions, changes in operating conditions,
and other factors described under the heading "Factors Affecting Future Results"
in Item 1 of ExxonMobil's most recent Form 10-K.
Trisha Perkins, 713/656-4376
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