The finalisation of the agreement is contingent upon approvals from Petronas and PETROVIETNAM. Credit: T. Schneider/Shutterstock.com.

Hibiscus Petroleum Berhad’s subsidiary, Hibiscus Oil & Gas Malaysia (HML), has inked a heads of agreement with PetroVietnam Exploration Production Corporation (PVEP) for the tie-in of Block 46/13 production sharing contract (PSC) production, offshore Vietnam, to the PM3 Commercial Arrangement Area (PM3 CAA) PSC facilities.

This strategic move is aimed at enhancing the utilisation of the PM3 CAA PSC infrastructure.

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HML is the operator of the PM3 CAA PSC, while PVEP is the operator of Block 46/13 PSC.

The agreement specifies the engineering and construction terms for the facilities tie-in, as well as the arrangements for handling the product.

This will allow the production from Block 46/13 to be processed through the existing PM3 CAA PSC facilities. The utilisation of available capacity at these facilities is expected to be optimised under the new agreement.

A commercial framework outlined in the tie-in agreement will govern the handling of production and the allocation of costs associated with Block 46/13.

The finalisation of this agreement is contingent upon approvals from Petroliam Nasional Berhad (Petronas) and Vietnam National Industry – Energy Group (PETROVIETNAM).

This collaboration is part of the PM3 CAA PSC Master Hub Strategy, which Hibiscus Petroleum, through HML and its partners PETRONAS Carigali and PVEP, is pursuing.

The strategy aims to extend the economic life of the PM3 CAA by sharing costs and optimising the use of shared infrastructure.

The arrangement also highlights the strengthening of cross-border cooperation between Malaysia and Vietnam.

Both Hibiscus Petroleum and PVEP are working in close coordination under the guidance of their respective national oil companies, Petronas and PETROVIETNAM, to bring this initiative to fruition.

In April, Hibiscus Petroleum secured a 20-year extension for the PM3 CAA PSC and upstream gas sales agreement (UGSA).