SapuraKencana Petroleum and Petrofac Energy Developments have reached a mutual agreement with Petronas for the cessation of the Berantai Risk Service Contract (RSC), for the Berantai field, offshore Malaysia.

The Berantai RSC was signed on 31 January 2011 with Petronas and was the first RSC awarded by Petronas. It is for the development and production of petroleum from the Berantai field, located offshore Malaysia.

Participating interests in the Berantai RSC are held by SapuraKencana Petroleum subsidiaries Sapura Energy Ventures Sdn. Bhd., and Kencana Energy Sdn. Bhd. with 25% each. Petrofac Energy Developments owns the remaining 50 percent.

With the cessation of the RSC, which will be effective on September 30, 2016, Petronas will reimburse all outstanding capital and operational expenditures to the contractors by June 2017, SapuraKencana Energy said on Monday.

As part of the arrangement, the ownership of Berantai FPSO will be transferred to Petronas.

“We continue to support Petronas in its efforts to reduce costs and optimise its operations with a view of preserving the long-term value of the project. We would like to thank Petronas for giving us the opportunity to demonstrate our capabilities to construct and install an integrated facility for the Berantai field. Together with our partner, we have managed to operate the facilities over the past 4 years safely,” said Shahril Shamsuddin, President and Group Chief Executive Officer of SapuraKencana Petroleum Berhad.

In a separate statement, Petronas said that the move will allow Petronas to minimize the project’s long-term value erosion and optimize the development and production activities in Malaysia, in line with its efforts to reduce costs and increase the efficiency of its operations.

The Berantai field is located in Block PM 309 in the Malaysian sector of the South China Sea, 195 km from Kemaman Supply Base, offshore Terengganu Malaysia.