UK oilfield service provider mulls RM1.24 bil Malaysian asset sale

Petrofac’s plan is to remain a cost-efficient, capital-light business, says its annual report. (Petrofac pic)

SINGAPORE: Petrofac Ltd, the United Kingdom-listed oilfield service provider, is weighing a sale of its Malaysian assets for about US$300 million (RM1.247 billion), according to people with knowledge of the matter.

The company has started gauging interest from potential investors on the planned divestment, said the sources, asking not to be named as the discussions are private.

The assets that could be on sale include a stake in an offshore oil field development known as PM304, one of them said.

Petrofac is the latest oil company looking to monetise its investments in Malaysia. Exxon Mobil Corp is considering a sale of its offshore assets which could raise as much as US$3 billion, Bloomberg News reported in October, while Murphy Oil Corp in March agreed to sell its portfolio in Malaysia for US$2.13 billion.

Shares of Petrofac fell as much as 1.8% in early London trading on Friday.

Malaysia is an operational centre for Petrofac in Asia Pacific, according to the company’s website. Besides the offshore oil field, it recently completed an engineering, procurement, construction and commissioning contract worth more than US$500 million for a refining project in Johor.

Petrofac’s plan is to remain a cost-efficient, capital-light business in 2019 after several divestments last year, its chief executive officer Ayman Asfari said in an annual report.

Last year, the company raised USD$800 million through the sale of non-core assets that included its interests in the Greater Stella Area development in the North Sea and stakes in its Mexico operations and assets in Chergui, Tunisia.

Petrofac, which has projects in 29 countries, is looking to raise cash and to further strengthen its balance sheet through a transaction in Malaysia, the people said.

Sale deliberations are ongoing and may not necessarily result in a deal, they said. A representative for Petrofac said the company does not comment on market rumour.