KOTA KINABALU (Sept 25): SMJ Energy Sdn Bhd advises that it currently has no equity stake in the SB-403 Production Sharing Contract (PSC) and is not a party to the agreement.

However, SMJ Energy has a ‘back-in right’ that allows it to decide whether to join as a partner in the future in the event of exploration success taking also into account commercial, technical, environmental and other factors.

“SMJ Energy acts as a prudent financial investor and works with reputable oil and gas companies with proven ESG (Environmental, Social & Governance) track records,” said the company in a statement today.

It was responding to the call of RimbaWatch urging the Sabah state government to not approve any oil and gas exploration activities within a site called Block SB-403, which it claimed was situated entirely within the state’s protected marine park.

The environmental watchdog said the Tun Mustapha Marine (TMP) Park in Sabah is listed as International Union for Conservation of Nature’s (IUCN) Category VI marine protected area, which only permits low-impact activities.

TMP was gazetted by the Sabah government in 2016.

RimbaWatch claimed in a statement on Wednesday that a production sharing contract has been signed for SB-403 between Petronas Carigali, EPMV and SMJ Energy. The block is located entirely within the TMP’s boundaries.

Oil and gas activities are contrary to the aims of IUCN Category VI protected areas, and the zoning plans of the TMP. These activities risk damaging the marine environment of the TMP; including risks to 45,000ha of reefs, 17,000ha of mangroves and over 180 vulnerable and endangered species, said the group.

It added these activities also threaten the fishing-dependent livelihoods of over 85,000 villagers, including from the Bajau Laut and Ubian communities.

RimbaWatch further claimed that Petronas and the Sabah State Government are not transparent on the fact that oil and gas activities are planned in a marine protected area and no environmental impact assessment (EIA) can be found for existing activities.

It recommended the Sabah authorities to ensure that no permits are approved for oil and gas activities in the park; Petronas should commit to not exploring for oil and gas in protected areas; and the Department of Environment should disclose the status of any EIAs.