Petronas to sell 25 percent stake in Canada gas assets

SINGAPORE Tue Feb 25, 2014 3:24pm IST

President and Chief Executive Officer of Malaysia's national oil company Petronas, Shamsul Azhar Abbas, delivers his address during the World Gas Conference 2012 in Kuala Lumpur June 4, 2012. REUTERS/Bazuki Muhammad/Files

President and Chief Executive Officer of Malaysia's national oil company Petronas, Shamsul Azhar Abbas, delivers his address during the World Gas Conference 2012 in Kuala Lumpur June 4, 2012.

Credit: Reuters/Bazuki Muhammad/Files

Related Topics

Stocks

   

SINGAPORE (Reuters) - Malaysia's Petronas has agreed to sell a 25 percent stake in its Canadian shale gas assets to an Indian company and an Asian gas buyer, the state firm's president and chief executive, Shamsul Azhar Abbas, said on Tuesday.

Petronas is looking to share some of the costs of bringing liquefied natural gas (LNG) from North America to energy-hungry Asia. Indian state oil and gas companies want to expand their portfolios of exploration and producing assets.

The Malaysian firm has already sold a 10 percent stake in Progress Energy Resources Corp, and the integrated shale gas development and LNG project, to Japan Petroleum Exploration (1662.T) and another 3 percent to Petroleum Brunei.

"I am pleased to announce that we have just finalised a further 25 percent equity participation from an Indian party and an established Asian LNG buyer," Shamsul said at the LNG Supplies for Asian Markets conference.

He did not name the Indian company or the Asian LNG buyer, and wouldn't disclose the price to be paid for the full stake. Sources had said earlier that Petronas was in talks with state-run Indian Oil Corp (IOC.NS) on a 10 percent stake.

The Indian cabinet earlier this month approved IOC's bid to buy a 10 percent stake in Progress Energy Resources for C$1 billion, a government source said.

Other sources said the Indian company this month secured a $900 million one-year bridge loan from a group of banks to back the Canadian purchase.

An IOC official acknowledged his firm would soon sign a deal and is in the process of raising fund for the acquisition.

"Now it is a matter of days," said the IOC source when asked when the deal with Petronas could be signed.

Petronas CEO Shamsul said on the conference sidelines the buyers can be announced only next week, when the deal will be signed.

Petronas has previously said it wants to sell up to 50 percent of the Canadian project, which means it now has another 12 percent to offload.

"We are in advanced talks with other buyers for the remaining 12 percent," Shamsul said, without providing any further details.

Reuters has previously reported, citing sources, that Petronas was also in talks with China firms as well.

Petronas, which has been expanding abroad to shore up future earnings as output slows at home, bought Canada's Progress Energy Resources in 2012 in a deal worth around $5 billion that gave it shale gas properties in northeastern British Columbia.

Development of the shale gas resources and an LNG facility of 12 million tonnes per year have been pegged at $35 billion.

Shamsul declined to comment on a media report saying the final investment decision (FID) on a refinery and petrochemical project in Johor would be delayed further.

Petronas last year announced a second delay to the project in southern Johor state to 2018, and said a final investment decision would be taken in the first quarter of 2014.

A delay to the $19 billion petrochemicals complex could deal a blow to Malaysia's economy as well as local oil and gas services firms hoping for work on the massive complex.

(Additional reporting by Niluksi Koswanage in KUALA LUMPUR and Nidhi Verma in NEW DELHI; Editing by Muralikumar Anantharaman and Tom Hogue)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Fuelling Change

REUTERS SHOWCASE

NSEL Fraud

NSEL Fraud

Govt orders Financial Tech to absorb NSEL, liabilities  Full Article 

Stalemate

Stalemate

WTO prepares for crisis talks as India keeps veto on global deal.  Full Article 

Deal Talk

Deal Talk

Smartphone repair company B2X steps up expansion with Indian deal.  Full Article 

Earnings Season

Earnings Season

HDFC Bank eyes pickup in corporate credit.  Full Article 

JLR China

JLR China

JLR sees 20 percent growth in China sales this year - exec  Full Article 

Iron Ore Imports

Iron Ore Imports

JSW Steel to boost iron ore imports by up to 80 percent.  Full Article 

Pollution Levels

Pollution Levels

Delhi braces for worst air quality this Diwali week.  Full Article 

Remembering Margerie

Remembering Margerie

Total’s "Big Moustache"- bon vivant, deal-maker and risk-taker .  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage