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Petronas Exploring $3 Billion African Upstream Asset Sale

Posted: August 24, 2022 at 1:09 pm   /   by   /   comments (0)

Petronas could sell its Egyptian upstream assets as it looks to offload part of its African portfolio: Malaysian oil firm Petroliam Nasional Berhad (Petronas) is inviting bids for its upstream assets in Africa — including its local concessions — in a transaction that could be worth up to USD 3 bn, Bloomberg reports, citing sources it says has knowledge of the matter.

The details: The Malaysian state oil company has hired an advisor to gauge interest in its African upstream assets in Egypt, Chad, Gabon, Gambia, Senegal, and South Sudan. The assets could be sold in pieces and may interest other multinational energy firms or financial investors, the sources reportedly said. Petronas is also reportedly also considering sales of its downstream holdings across the continent.

The local assets that could be up for grabs: The company with its partner Shell owns Mediterranean upstream assets including the West Delta Deep Marine (WDDM) project and the Al Fanar and North Sidi Gaber gas concessions. On the downstream side, Petronas holds a 35.5% stake in the company that owns the Idku LNG plant, among other projects. The firm has reportedly been considering an exit from all its Egyptian assets since as early as March, according to a recent report by oil and gas newsletter MEES.

Petronas Explores $3 Billion African Upstream Asset Sale

  • Malaysia state energy firm working with adviser to invite bids
  • Petronas evaluates geopolitical risk of its overseas business

Malaysian state oil company Petroliam Nasional Bhd. has started inviting bids for its upstream assets in Africa, which could fetch as much as $3 billion, people with knowledge of the matter said. 

Petronas is working with an adviser to gauge interest in the portfolio, which includes operations in Chad, according to the people, who asked not to be identified because the information is private.

The assets are likely to attract other international energy companies or financial investors, and could be sold piecemeal to different buyers, the people said. 

The Malaysian firm has also been considering options for its downstream assets in Africa, though it hasn’t decided how to proceed, two of the people said. Deliberations are at an early stage and there’s no certainty they’ll result in a transaction, the people said.

Petronas has upstream projects in countries including Chad, Egypt, Gabon, Gambia, Senegal and the Republic of South Sudan, according to its website. 

The company said in an emailed statement that it “regularly and proactively” reviews its entire portfolio to ensure it remains resilient amid the evolving energy landscape. It declined to comment on specifics. 

Petronas has been planning to divest assets in countries including Chad, Myanmar and Azerbaijan as part of a global operational shuffle, Bloomberg News reported in February. The Malaysian energy group said in March that it’s evaluating geopolitical risk at the country level on all of its overseas operations. 

Since then, it’s withdrawn from the Yetagun offshore gas field in Myanmar and closed the sale of a stake in an Azerbaijan project to Lukoil PJSC. 

(Sources: & Bloomberg)