WITH nearly 50 years involvement in Sabah’s oil and gas sector, Shell sees the need to adapt to changes in the industry, especially in reducing emissions. 

In Sabah, Shell has two operational companies: Sabah Shell Petroleum Co Ltd (SSPC), which is responsible for upstream operations and Shell Timur Sdn Bhd (STSB), which is responsible for downstream / mobility operations. 

Both have their headquarters in Plaza Shell, Kota Kinabalu. Shell also operates an East Malaysia supply base at the Asian Supply Base (ASB) plant in Labuan.

Shell’s upstream presence in Sabah dates back to the early 1980s, when oil was produced from the shallow waters of St Joseph platform (1981), the Barton platform (1982), and the drilling of Malaysia’s first horizontal well in the Erb West field, 180 km offshore Labuan, in 1984.

Despite an earlier announcement by Shell Timur Sdn Bhd to close the 36 retail stations in Sabah and Labuan, Shell’s portfolio in Sabah remains considerable today. 

“We did reduce our office footprint in Kota Kinabalu but this was part of our larger efforts across Shell Malaysia to consolidate our upstream technical functions into one location,” said Siti Hurrairah Sulaiman, Country Chair of Shell Malaysia.

A Sarawakian, she is the first woman to hold this position in the company’s history in Malaysia. She is also the Senior Vice President Upstream accountable for upstream business in Malaysia and provides the oversight of all Shell businesses in Malaysia. 

She thanked the Sabah, Sarawak and Federal governments for recognising the industry’s challenges and for ensuring the sustainability of businesses in Malaysia. 

Shell Timur Sdn Bhd is committed to offering high-quality petroleum products in East Malaysia and would continue to invest in Shell retail stations. 

“We look forward to offering new services for our retail customers in East Malaysia, including offering non-fuels retailing options such as Select Shop and Deli2Go Shell Malaysia has a long history in East Malaysia, and we look forward to many more,” said Siti who joined the industry in 1994 and graduated from Imperial College London in mechanical engineering 

Shell operates 78 retail stations in Sabah, and the Shell App, which allows users to purchase petrol from the comfort of their automobile using a credit or debit card, is available at 41 stations. 

She said the majority of Shell’s current production portfolio in Sabah is oil, which comes from Deepwater fields, Gumusut-Kakap and Malikai.” 

Shell is also a non-operating partner in the Kebabangan Gas field alongside Petronas Carigali and Conoco Phillips, a field off Sabah that supplies gas to the domestic market as well as LNG customers.

Shell Upstream, which recently shifted its focus to deepwater development, is a pioneer in the country’s deepwater development, operating the Gumusut-Kakap and Malikai oil production fields, since 2014 and 2016, respectively. 

Gumusut-Kakap, a semi-submersible floating production system, and Malikai, the country’s and the region’s first tension-leg platform, are both engineering marvels located off Sabah, providing substantial contributions to the nation’s oil and gas production. 

Gumusut-Kakap reached a crucial milestone last year when SSPC made a final investment decision (FID) on Phase 4, while Phase 3 received first oil delivery in July 2022.

“We are making sure our offshore facilities at Gumusut-Kakap and Malikai operated efficiently and reliably, and we continue to look for abatement options year after year to reduce our GHG emissions, like reducing the number of running Gas Turbines when it is no longer required,” she said.

SSPC and Shell Sabah Selatan Sdn Bhd (SSS) also inked Production Sharing Contracts (PSC) with Petronas last year to search for oil and gas offshore Sabah. SSPC will invest in exploration activities in these new deep-water blocks of SB-2W and SB-X off the coast of Sabah.

“We are very proud of our deepwater assets,” said the mother of three daughters who loves cooking and spending her time outdoors, hiking and walking. 

Awards garnered by the Malikai and Gumusut-Kakap teams are; 

• In 2017, the Malikai Deepwater Project in Sabah received the Institutes of Engineers (IEW) Outstanding Award, marking the first time in three decades that an oil and gas programme has received this honour.
• In 2017, Malikai in Sabah received the Asean Outstanding Engineering Achievement Award from the Asean Federation of Engineering Organisations, making it Malaysia’s first and only oil and gas project to get the top accolade in design and construction in Asean.
• Gumusut-Kakap in Sabah received Gold Merit from the MSOSH OSH Award in 2018.

In addition to this, Shell’s global strategy, Powering Progress, strives to create value for shareholders, customers, and society at large by attaining net-zero emissions, powering lives, respecting nature, and generating shareholder value. 

“As a global company, our goal is to provide more and cleaner energy solutions. This will be accomplished while profitably transforming Shell to a net-zero emissions energy business by 2050,” said Siti. 

Team Shell with volunteers and villagers during the Access To Energy initiaitve visit.

“That is our long-term objective. Today however, 80pc of society’s energy still comes from oil, gas and coal. A balanced energy transition is needed to ensure that the world does not dismantle the current energy system faster than it can build the clean energy system of the future. Shell will therefore continue to supply oil and gas for years to come, while helping to transform the supply and demand of low-carbon energy.

Our aim now is to put our strategy into action, i.e. to deliver more value with less emissions. Here, we will play to our strengths, emphasising performance, discipline, and simplification, while demonstrating that Shell is best positioned to win through the energy transition,” she said. 

Shell will achieve its climate goal in three ways. 

“First, we must cut emissions from our own operations, known as Scope 1 and 2 emissions. We intend to cut absolute emissions by half by 2030, compared to 2016. This includes all emissions from our operations in Scope 1 and all emissions from the energy we buy to run our operations in Scope 2.

“Shell Group has reduced its global carbon emissions from operations by 30pc on a net basis by the end of 2022 compared to 2016. This is more than half of the company’s aim of a 50pc reduction by 2030,” she said. 

“In our upstream business in Sabah, we do so in our day-to-day operations by ensuring the effective and reliable operation of our offshore facilities at Gumusut-Kakap and Malikai.

“We continue to explore abatement solutions to lower our GHG emissions year after year, such as reducing the number of running Gas Turbines when they are no longer needed.

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“We use our “Find small, Fix small” method to detect and repair any gas leaks,” she said.

She said because refrigerant gases are a high global warming GHG, SSPC implemented the recovery of refrigerant gas from their HVAC systems during maintenance, so that these refrigerant gases can be utilised and not be released into the atmosphere.

Shell aims to keep its methane emissions intensity for all oil and gas operated assets to below 0.2% by 2025 (methane is 28 times more potent than CO2 in terms of global warming potential). Shell is tracking its methane emissions by using the OGMP 2.0 Framework Gold Standard, which will aid efforts to find additional methane emission reductions. 

Shell Malaysia is completely committed to meeting Gold Standard reporting requirements for all upstream assets, including those in Sabah.

“For future oil and gas developments, we will consider low-carbon paradigms such as using renewable energy as a source of electricity,” she said. 

In terms of low-carbon solutions, she said that Shell has bought Malaysian waste oil recycling firm EcoOils, which has a factory in Lahad Datu, Sabah. 

EcoOils is a forward-thinking company that recycles spent bleaching earth (SBE), a byproduct of palm oil filtering, to create spent bleaching earth oil (SBEO). Spent bleaching earth oil is a globally approved biofuels feedstock that may be utilised at Shell’s global biofuels facilities to manufacture low carbon fuels like sustainable aviation fuel. 

“This is an important acquisition that supports Shell in its global aim to be a material, profitable supplier of low carbon fuel to customers in hard-to-decarbonise sectors, like marine, road transport and aviation,” she said. 

Furthermore, Sabah is endowed with lush natural rainforests that provide a variety of vital ecosystem services, including the ability to act as a substantial carbon sink.

The preservation and protection of these forest landscapes has the potential to contribute to global climate change mitigation. 

“Shell is eager to work with Sabah to investigate opportunities in nature-based solutions.” “Through nature conservation, enhancement, and restoration, such projects can avoid and reduce emissions in the atmosphere,” she said.