Petronas pitches $1 billion stake in offshore gas project

Petronas pitches $1 billion stake in offshore gas project

Malaysia’s Petronas has pitched an estimated US$1 billion stake in an upstream local gas project to a range of multinational oil majors, hoping to prompt a bidding war for the offshore gas block.

Potential bidders include Royal Dutch Shell (LSE:RDSA), ExxonMobil Corp (NYSE:XOM), Thailand’s PTT Exploration and Production (BKK:PTTEP), along with a host of Asian firms.

If a deal can be agreed, it would represent Petronas’s biggest upstream sale since the harsh decline in oil prices began over two years ago, providing a much-needed boost to the firm’s capital reserves.

The state-owned oil and gas company first considered selling a stake of up to 49% in the SK316 offshore gas block in Malaysia’s Sarawak state back in February, according to Reuters reports.

In a statement, Petronas confirmed it was searching for partners with the technological expertise and strategic capabilities to develop and operate the various fields in the prized gas block.

“We are confident that 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.

The firm expects to begin receiving bids over the next few weeks, having begun providing financial and operational data to prospective buyers of the gas project.