As the oil and gas industry has been impacted by a double blow of Covid-19 pandemic and low oil prices, start-up Mulk Oil & Gas Synergy Sdn Bhd (MOGS) enters the Malaysian market to offer their expertise in reviving idle oil wells in Malaysian waters.
Established in May 2020. MOGS plans to offer an innovative state-of-the-art technology solution on well services. The company aims to collaborate with Production Sharing Contract (PSC) operators under their well reactivation programme for idle wells in Malaysia.
Its Executive Vice President Mohd Zaidan Khalid said, “The potential projects will contribute an IRR exceeding 25 percent for MOGS, and also stimulate job opportunities for local vendors”.
Mohd Zaidan said MOGS targets an estimated 20 idle wells being reactivated annually as the move would be a preferred cost optimisation exercise amid weaker oil prices environment as opposed to drilling for new wells.
MOGS will bring additional footage in local upstream activities using a Compact High Mobility Semi- Submersible Rig, SSR HIDAYA 01, that embedded a proven technology from Europe that is efficiently mitigate various accessibility issues to the wellhead platform related to aging facilities, small footprint, seabed conditions and water depths.
SSR HIDAYA 01 is able to work on between 30 metre and 500 metre water depth for maintenance and sub-sea operations and is adaptable to adverse weather conditions. It is designed for operation in wave height up to 5 metre with increase in operations uptime up to 85 percent.
According to a feasibility study conducted by the company, SSR HIDAYA 01 is expected to contribute significant cost savings of 20-30 percent to the well intervention operations as compared to other service rigs currently available in the market.
MOGS has also partnered with one of the major oilfield service providers, Schlumberger, where the latter will provide its technical and technology support to the company to deliver an End-to-End solution for idle well restoration project in Malaysia.
To strengthen the company’s financial capabilities, Yayasan Pesara Kerajaan Malaysia has acquired 30 percent stake in MOGS at an undisclosed amount.
Yayasan Pesara Kerajaan’s Board of Trustee Datuk Wira Jalilah Baba said foundation sees potential of the company’s business model. She added that the stake acquisition will also ensure that MOGS able to deliver returns to the shareholders.
The foundation is an umbrella body, where it coordinates and assists various registered government retiree and veteran associations in the country.
To-date, there are more than 850,000 government pensioners throughout Malaysia.
Datuk Wira Jalilah said the revival of idle oil wells project by MOGS is estimated to be around US$3.0 billion, of which 40 percent of the amount would be oil tax revenue for the government.