KOTA KINABALU: July 14, 2026 – The Sabah government has secured a further decade of contracted revenue after renewing the charter for the FPSO Ratu Nusantara in Indonesia until 2036, in what officials hailed as a vindication of the state’s strategic restructuring of its overseas energy investments.
The floating production vessel, which operates at the Bukit Tua oil field off the coast of East Java, generates long-term income for Sabah through Sabah International Petroleum (SIP) and its subsidiary, PT M3 Ketapang Sejahtera. The latest agreement ensures the investment will continue to contribute to the state’s coffers well into the next decade.
The extension also marks a milestone in the turnaround of SIP under SMJ Energy Sdn Bhd (SMJE). When SMJE assumed responsibility for the company, SIP was grappling with significant financial difficulties that demanded a comprehensive restructuring.
Through disciplined financial management and a long-term commercial strategy, SMJE has restored the company’s fiscal health, cleared its debts and repositioned it as a profitable energy asset now delivering sustainable returns to Sabah.
Datuk Seri Panglima Masidi Manjun, Sabah’s Finance Minister and SMJE Chairman, said the contract renewal had been earned through performance rather than privilege.
“This extension was not given to us; it was earned through commercial performance and operational excellence,” he said. “By turning SIP around, SMJE has not merely revived a state-owned company. We have transformed it into a strategic asset that continues to generate long-term value for Sabah.
“This renewal proves that Sabah can successfully own and manage world-class energy assets while ensuring the benefits flow back to our people.”
A contract exchange ceremony was held in Jakarta on 10 July and officiated by Djoko Siswanto, head of Indonesia’s upstream oil and gas regulator, SKK Migas.
The decision to renew the charter reflects more than 11 years of consistent operational performance. Since the contract was first awarded in 2012, the FPSO Ratu Nusantara has achieved first oil, secured an early extension during the global pandemic and recorded more than 2.7 million man-hours without a single lost-time injury.
That track record gave confidence to both SKK Migas and PETRONAS subsidiary PC Ketapang II Ltd to approve the decade-long extension.
For SMJE, the renewal locks in contracted revenue for another ten years, providing a stronger platform to pursue further strategic investments that will continue to create long-term value for Sabah.
The impact extends beyond financial returns. While the investment generates income for Sabah, the FPSO Ratu Nusantara is crewed entirely by Indonesian offshore workers, creating skilled employment and deepening the Malaysia-Indonesia partnership, which has grown over more than 13 years.
Both parties have expressed a commitment to exploring broader cooperation opportunities in the energy sector in the years ahead.
