Shell Malaysia to invest RM10b over next 5 years

Shell Malaysia to invest RM10b over next 5 years
03-06-2008
by Gan Yen Kuan & Azie Izzati

KUALA LUMPUR: Shell Malaysia has allocated RM10 billion for capital expenditure over the next five years.

Its chairman Datuk Saw Choo Boon said the priority of investments would be given to exploration and production activities.

Globally, Shell will spend US$27 billion (RM87.75 billion) this year for capital expenditure.

“We have been here since 1891. We will continue to do our best to grow the business here,” Sew said during a media roundtable yesterday. The meeting was held in conjunction with the visit of Royal Dutch Shell Plc chief executive Jeroen van der Veer to Malaysia.

According to van der Veer, global energy demand is expected to double by 2050, and the conventional oil and gas, or “easy oil and gas”, would not be sufficient to meet the demand.

He said Shell had gradually moved towards sourcing unconventional energy, and switched its focus to the East from the West and on a combination of upstream and downstream activities.

On Shell’s first deepwater operation in Malaysia, Gumusut-Kakap field in Sabah, Saw said the development progressed as planned despite the escalating construction costs.

“We are now at the stage of developing the field for production. It is on schedule.

“We have taken all that (rising construction costs) into consideration. Indeed the cost is very high. We are able to manage it, and we are committed to bringing the field on line on time,” he said.

Shell has a 33% interest in the Gumusut-Kakap development. Its joint-venture partners are ConocoPhillips Sabah (33%), Petronas Carigali (20%) and Murphy Sabah Oil (14%).

MISC Bhd’s unit Malaysia Marine and Heavy Engineering Sdn Bhd is the contractor for building the semi-submersible production system for the Gumusut-Kakap project.

Oil extracted from the field will be exported via a pipeline to a new oil and gas terminal, which will be built in Kimanis, Sabah.