SLB has won sizable engineering, procurement and construction contracts for two deepwater projects offshore Malaysia, with commercial terms undisclosed and counterparties not named at the time of publication.
The awards extend a regional upswing in subsea and deepwater activity and underline the continued preference for integrated delivery in complex water depths. While details remain limited, the timing aligns with a visible pipeline of Malaysian offshore work advancing from concept to execution. The projects will test execution capacity in a market where vessel time, subsea hardware, and specialised labour remain tight.
Project Scope and Delivery Model
Integrated EPC awards in Malaysian deepwater settings typically span subsea trees, manifolds, umbilicals, risers and flowlines, plus controls integration and commissioning. Contractors increasingly fold in digital planning, standardised hardware, and remote operations to compress schedules and lower interface risk.
As a reference point on delivery capability, SLB highlighted multi‑region deepwater drilling contracts earlier this year with Shell, stating, “We are proud to continue our long-standing relationship with Shell through the fulfilment of these multi-region deepwater contracts,” said Wallace Pescarini. The Malaysian EPC wins, though separate, would likely rely on similar playbooks for risk management and repeatable execution.
Strategic Context In Sabah Waters
Activity in Sabah has been steadily building. Shell started Phase 4 production at the Gumusut‑Kakap‑Geronggong‑Jagus East development in March 2025, reinforcing the basin’s long‑cycle role in national liquids output.
In parallel, McDermott secured a large subsea contract from PTTEP for the Block H expansion to supply additional gas to the PFLNG Dua facility, signalling fresh gas tie‑ins across deepwater fields. PETRONAS also launched its 2025 Malaysia Bid Round through Malaysia Petroleum Management, offering new exploration blocks and discovered resource opportunities that point to sustained upstream capital formation. Together, these moves indicate a multi‑year backlog that can support incremental EPC awards.
Implications For Supply Chains and Finance
Contractors will need to balance local content, fabrication slots, and marine spreads against schedule risk, particularly where simultaneous operations converge around Sabah logistics hubs. Operators typically fund these projects on a balance sheet under Malaysia’s production sharing framework, with cost recovery mechanics shaping tender design and timing. Execution risk is therefore shared across owner and EPC contractor through phasing, standardisation, and performance metrics that reward schedule certainty.
PETRONAS has been explicit about technology partnerships to lift efficiency, noting, “These strategic collaborations with SLB, Velesto and NOV signify a leap forward for MPM and Malaysia’s E&P sector,” said Datuk Ir. Bacho Pilong. If SLB’s new Malaysia awards proceed on an integrated basis, expect digital planning, configurable subsea kits, and remote support to anchor delivery and mitigate cost pressure.
What To Watch Next
Key milestones include contractor disclosure of scope and counterparties, fabrication starts for subsea hardware, and any marine spread reservations that indicate installation windows. Operators will also signal phasing decisions as drilling and completions align with subsea availability.
In the near term, headline risk sits with global vessel availability and component lead times, both of which tightened through 2025. Any slippage would likely be scheduled rather than scope, given Malaysia’s push to mature deepwater barrels and backfill gas to LNG infrastructure. The awards, once detailed, should clarify how Malaysian subsea work is shared out between international EPC houses and domestic partners in the 2026 to 2028 window.