Kuala Lumpur, June 23: Malaysia's state-owned oil company Petronas on Monday signed an agreement with Exxon Corp's wholly owned Malaysian unit to provide gas supplies to the country, a Petronas statement said.

Petronas said Exxon's Esso Production Malaysia Inc and Petronas Carigali Sdn Bhd agreed on a new gas production sharing contract (PSC) to provide gas supplies for the next 25 years to the Peninsular Gas Utilisation project.

The two companies will be awarded select gas fields and reservoirs in the South China Sea off North-east peninsula Malaysia as well as Petronas gas-cap fields, with each having a 50-per cent participating interest, the statement said.

Esso will be the operator in the northern region of the fields and Petronas Carigali for the southern region.

The estimated gas reserves in the fields stand at 12.7 trillion cubic standard feet.

Esso had developed Jerneh field which came into production in 1992 and the Lawit field which started production this April to meet its supply obligation.

Under the new agreement, Esso will surrender to Petronas its other undeveloped gas fields awarded to the company under the Natural Gas Project and Sales Agreement which was signed in 1990.

The new agreement takes effect from January next year.

The two companies are expected to meet about two-thirds of the projected gas demand in Peninsular Malaysia for the next 25 years, the statement said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.