Petronas pitches $1bn offshore gas project stake to oil firms: Sources

SINGAPORE: Malaysia’s Petronas has pitched an estimated $ 1 billion stake in a prized upstream local gas project to potential bidders including Royal Dutch Shell, ExxonMobil Corp., Thailand’s PTT Exploration and Production ( PTTEP) and Japanese firms, sources familiar with the matter said.

If successful, the deal could mark Petronas’ biggest upstream stake sale since oil prices started declining more than two years ago. Petronas is targeting lowering operating expenses, job cuts and project rollbacks to help it navigate through the low oil price environment.

The state- owned oil and gas company has approached about a dozen prospective buyers including global oil majors and Asian firms focused on Southeast Asia, said the sources, who declined to be identified as the talks are private.

They said Petronas has begun providing financial and operational data to the companies and expects to receive bids over the next few weeks.

Citing sources, Reuters reported in February that Petronas was considering selling a stake of as much as 49 percent in the SK316 offshore gas block in Malaysia’s Sarawak state.

In a statement to Reuters, Petronas said that through its subsidiary, Petronas Carigali Sdn Bhd, it is looking for partners who can bring the technology and capabilities to explore, develop and efficiently operate the various fields and opportunities in the SK316 offshore gas block.

“We are confident that we will attract the right partners to maximize the potential value of these opportunities to help meet the world’s growing oil and gas demand,” Petronas said.

It was not immediately known what the individual companies’ response to Petronas’ approach was. ExxonMobil declined to comment, while Shell referred the query to Petronas.

A spokeswoman for PTTEP declined to comment on the deal but said the company was keen to invest in Southeast Asia because it had expertise in the region where costs and risks were low.