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Brunei oil firm buys 3% stake in Petronas’ Canada assets

 | December 10, 2013

The agreement leaves Petronas with 87% of the venture of which a further 36% is likely to be divested to future partners by the national oil company.

by Azli Jamil

PETALING JAYA: Petronas announced that Brunei National Petroleum Co Sdn Bhd (Petroleum Brunei) has taken a 3% stake in its Canadian shale gas asset and proposed liquified natural gas (LNG) facility, as well as a share of the facility’s LNG production for a minimum of 20 years, all for an undisclosed sum.

The agreement was signed on Dec 8, 2013, making Petroleum Brunei the second partner after Japan Petroleum Exploration Co Ltd took a 10% stake in April 2013, valued at about US$1 billion (RM3.2 billion), leaving Petronas with 87% of the venture of which a further 36% is likely to be divested to future partners by the national oil company.

Petronas has been reported by The Malaysian Reserve as willing to pare its share in the project by 49% in order to bring down its total cost of bringing cheap gas to Asian markets.

It has been reported to be in discussion with various parties willing to take up stakes in the Canadian venture.

“We look forward to adding additional partners in 2014 — a vital year for confirming the economics of our energy export initiative and helping lead Canada into the global LNG market,” said Michael Culbert, president and CEO of Petronas’ unit Progress Energy Canada, in a statement yesterday.

Reuters had reported in late July that Petronas was in discussions with China Petroleum & Chemical Corp for a 10% stake after a report in early July said that Indian Oil Corp Ltd was taking a 10% stake valued at about US$1 billion.

Apart from the stake sale, Brunei also announced the award of two production sharing agreements (PSAs) by Petroleum Brunei on a 50:50 basis involving Petronas Carigali Brunei Ltd (PCBL) and Shell Deepwater Borneo Ltd (SDBL) for Blocks N and Q offshore Brunei. PCBL will be the operator of Block N while SDBL for Block Q.

Petronas was reported to have committed RM300 billion from 2011 to 2015 on its global development projects including 65% on upstream activities, which the above agreement falls under.

It also signed two head of agreements (HoA) with the first towards formalising a unitisation arrangement for Malaysia’s Kinabalu West NAG field and Brunei’s Maharajalela North Panel field, and the second towards a provisional arrangement for joint development of Malaysia’s Gumusut/Kakap field and Brunei’s Geronggong/ Jagus-East field.

The first HoA paves the way for the two parties to resolve a number of issues relating to the unitisation and future development of these straddling fields while the second HoA is to establish joint development parameters for the Gumusut/ Kakap and Geronggong/Jagus- East fields based on a provisional production and cost sharing arrangement until a further agreement is reached on the status of the fields, said Petronas.

The last agreement signed was a memorandum of understanding by Malaysia Marine and Heavy Engineering Bhd, a unit of Petronas’ subsidiary MISC Bhd, with PB Services Sdn Bhd, a subsidiary of Petroleum Brunei, to explore the possibility of setting up a 30:70 joint venture respectively to provide engineering and fabrication services.

This content is provided by FMT content provider The Malaysian Reserve


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