Malaysia's Petronas Set to Buy 10% Stake in Giant Oman Gas Field
19 October 2018 - 6:20AM
Dow Jones News
By Ben Dummett and Sarah Kent
Malaysia's state oil company has agreed to acquire about a 10%
stake in the giant Khazzan natural gas field in Oman, according to
people familiar with the matter.
The planned purchase, which could be announced in the coming
days, gives Petronas -- also known as Petroliam Nasional Bhd -- a
toehold in one of the biggest fracking projects ever completed
outside the U.S., a $12 billion development run by BP PLC that
launched last year. BP's partner in the project, Oman Oil Company,
had been looking to sell a portion of its 40% stake in the gas
field. After Petronas's acquisition, the company will retain about
a 30% stake, while BP will retain its 60% interest.
The sale comes as many of the Middle East's state oil companies
look for ways to cash in and diversify their huge oil wealth. While
Saudi Arabia has pulled back from an initial public offering of its
state oil company, other big players in the region have continued
to pursue deals that could help them unlock value from their
assets.
Last year, Abu Dhabi's national oil company floated its retail
division, while earlier this month it sold a 5% stake in its
drilling unit to Baker Hughes.
Big oil companies are also increasingly betting on natural gas,
anticipating strong demand growth in the coming years. Major
producers like Qatar have significant plans to increase exports of
liquefied natural gas, targeting fast-growing economies in Asia.
Oman is the among the region's largest exporters of LNG after
Qatar.
Oman's heavy reliance on oil production hit home after prices
crashed in 2014. The country was part of the consortium of oil
producers that together with the Organization of the Petroleum
Exporting Countries sought to roll back production and prop up
prices. Its lower oil production caused the country's economy to
contract last year, despite modest growth in its non-hydrocarbon
economy, according to a July 2018 report by the International
Monetary Fund.
"Oman has posted double-digit-fiscal and current account
deficits over the past few years...[and] against that backdrop, the
authorities have launched reforms to bolster the fiscal position
and boost private sector-led growth and diversification," the IMF
said in its report.
For Petronas, this marks its second gas deal this month. The
company is among a consortium planning to develop a giant LNG
project in Canada announced earlier in October.
The Khazzan gas field is currently producing 1 billion cubic
feet of gas a day, with work underway to add another 500 million
cubic feet a day by 2021.
Write to Ben Dummett at ben.dummett@wsj.com and Sarah Kent at
sarah.kent@wsj.com
(END) Dow Jones Newswires
October 18, 2018 15:05 ET (19:05 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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