‘PETRONAS PITCHES US$1B STAKE IN UPSTREAM PROJECT’
Potential bidders include Shell, ExxonMobil, PTTEP and Japan firms, say sources
SINGAPORE
PETROLIAM Nasional Bhd (Petronas) has pitched an estimated US$1 billion (RM4.44 billion) stake in a prized upstream local gas project to potential bidders, including Royal Dutch Shell, ExxonMobil Corp, Thailand’s PTT Exploration and Production and Japanese firms, said sources familiar with the matter.
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.
Citing sources, Reuters reported in February that Petronas was considering selling a stake of as much as 49 per cent in the SK316 offshore gas block in Sarawak.
The state-owned oil and gas company had approached about a dozen prospective buyers including global oil majors and Asian firms focused on Southeast Asia, said the sources.
They said Petronas had begun providing financial and operational data to the companies and expected to receive bids over the next few weeks.
“It’s just what the environment is. Nobody wants to keep all the risk on their books,” said Vikas Halan, senior credit officer, corporate finance group at Moody’s, adding that he viewed the move as a rebalancing of Petronas’ portfolio.
“Petronas is the leader in the oil and gas space, especially on the gas side. The experience of getting or producing LNG and marketing LNG is quite an interesting one and Petronas becomes a logical choice for players,” he said.
Petronas said through its subsidiary, Petronas Carigali Sdn Bhd, it was 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 we will attract the right partners to maximise the potential value of these opportunities to help meet the world’s growing oil and gas demand,” said Petronas.
One financial source said a minority stake might not appeal to non-Asian oil majors but a decision to bid would depend on details of the stake being offered, valuations and the potential for long term partnerships with Petronas. Reuters