Exxon considering Malaysian offshore asset sale

By Manuel Baigorri and Elffie Chew on 10/9/2019

HONG KONG (Bloomberg) - Exxon Mobil is considering a sale of its offshore Malaysia upstream assets as part of U.S. energy giant’s divestiture program, according to people with knowledge of the matter.

The company is working with an adviser on the potential sale of the Malaysian assets, which could raise about $2 billion to $3 billion, the people said, asking not to be identified because the matter is private.

Exxon has started sounding out potential buyers, although sale considerations are at a preliminary stage and the company could decide against a transaction, the people said. Potential bidders could include other major energy companies with an interest in the region, the people said.

Exxon didn’t immediately respond to requests for comment outside of regular business hours in the U.S., where it’s headquartered in Texas, and representatives in Singapore and Australia weren’t able to provide comment.

The move follows Exxon’s $4.5 billion deal last month to exit Norway and the decision to put Australian assets back on the market, part of its efforts to fund one of the biggest corporate turnarounds in its history after years of stagnating production and a stock-price that’s lagged rivals. In Asia, Exxon is likely to exit projects worth a combined $5 billion in Vietnam, Indonesia, Thailand, Australia and Malaysia, Wood Mackenzie Ltd. analysts including Andrew Harwood said in a research note Monday.

Exxon produces oil and gas in Malaysia under four production sharing contracts with the state-owned Petroliam Nasional Bhd, according to its website. Its assets include a 30% stake in the offshore Tapis Blend operations, which produces a low-sulfur crude that was once a benchmark for Asian oil refiners. The PSCs cover 2.4 million acres offshore and have exploration and production terms ranging up to 38 years, Exxon said in its most-recent 10-K filing.

Also as part of Exxon’s Asia-Pacific divestment push, the company said last month that it’s trying again to offload its oil and gas assets in southeast Australia, including the long-producing Gippsland Basin project offshore Victoria state. The Australian newspaper reported in June that Exxon’s 50% stake in the assets, which include the Longford Gas Plant, could be worth about $3 billion.

Malaysia has been a busy market for energy deals. In April, Petronas agreed to buy stakes in two offshore Brazilian oil fields from Petroleo Brasileiro SA for $1.29 billion, expanding the southeast Asian state giant’s overseas portfolio. It also agreed to buy Amplus Energy Solutions Pte from I Squared Capital, amassing 500 megawatts of solar power in operation or under development.

A month earlier, PTT Exploration & Production Pcl agreed to buy Murphy Oil Corp.’s Malaysian oil and gas assets for $2.1 billion, deploying some of the Thai company’s massive cash reserves.

 

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