KOTA KINABALU: A strategic decision by the Sabah Government to restructure one of its overseas energy investments has delivered another significant return for the State, securing a further 10 years of contracted income through the extension of the FPSO Ratu Nusantara charter in Indonesia until 2036.
The floating production, storage and offloading (FPSO) vessel, which operates at the Bukit Tua oil field offshore East Java, generates long-term revenue for Sabah through Sabah International Petroleum (SIP) and its subsidiary, PT M3 Ketapang Sejahtera. The latest agreement ensures the investment will continue contributing to the State’s revenue stream well into the next decade.
The extension also marks another milestone in the transformation of SIP under SMJ Energy Sdn Bhd (SMJE). When SMJE assumed responsibility for the company, SIP was facing significant financial challenges that required a comprehensive restructuring exercise.
Through disciplined financial management and a long-term commercial strategy, SMJE restored the company’s financial health, eliminated its borrowings and repositioned it as a profitable energy investment that now generates sustainable returns for Sabah.
Sabah Deputy Chief Minister II cum Finance Minister Datuk Seri Masidi Manjun, who is also SMJE Chairman, said the contract renewal was achieved through performance rather than entitlement.
“This extension was not handed to us, it was earned through commercial performance and operational excellence. By turning around SIP, SMJE did more than revive a state-owned company. We transformed it into a strategic asset that continues to generate long-term value for Sabah.
“This renewal shows that Sabah can successfully own and manage world-class energy assets while ensuring the benefits flow back to our people,” he said.
The contract exchange ceremony was held in Jakarta on July 10 and was officiated by the Head of Indonesia’s Upstream Oil and Gas Regulator (SKK Migas) Djoko Siswanto.
The renewal reflects more than 11 years of consistent operational performance. Since the contract was first awarded in 2012, FPSO Ratu Nusantara has achieved first oil, secured an earlier charter extension during the global pandemic and recorded more than 2.7 million man-hours without a single lost-time injury.
This strong track record gave SKK Migas and PETRONAS subsidiary PC Ketapang II Ltd the confidence to extend the charter for another decade.
For SMJE, the renewal secures a further 10 years of contracted revenue, providing a stronger platform to pursue future strategic investments that will continue creating long-term value for Sabah.
The impact extends beyond financial returns. While the investment generates income for Sabah, FPSO Ratu Nusantara is operated entirely by an Indonesian offshore workforce, creating skilled employment opportunities and strengthening a Malaysia–Indonesia partnership that has developed over more than 13 years.
Both parties also expressed their commitment to exploring broader opportunities for cooperation in the energy sector in the years ahead.
