12 November 2013, News Wires – Malaysia’s state-owned Petronas is reported to be close to selling a stake in its Canadian shale gas assets to an Indian company in a move to offset the costs of a proposed LNG export scheme.
The company aims to spend $35 billion to exploit shale gas assets in north-east British Colombia, acquired through its $5 billion takeover of Canadian player Progress Energy Resources last year, and build a liquefied natural gas export terminal to supply gas-hungry Asian markets.
Earlier this year, sources told Reuters that Petronas was in talks to sell 10% of its Canadian shale gas assets to Indian Oil Corporation.
While not confirming the identity of the potential buyer, Petronas chief executive Shamsul Azhar Abbas told a results briefing in reference to the pending sale to an Indian player: “At this point in time, it’s very positive but subject to government approval, which should happen anytime now.”
The Malaysian company has already sold a 10% stake in the integrated shale gas development and LNG project to Japan Petroleum Exploration.
Petronas had previously said it would spend $20 billion to build two LNG trains on Canada’s West Coast. This includes a pipeline to be built by TransCanada from the fields in the shale-rich Montney region. The trains are expected to be ready by the end of 2018 or 2019.
Petronas has previously stated that a final investment decision on the entire project will be taken by the end of 2014.
Shamsul was more cautious about the fate of an $850 million deal to buy a stake in two Brazilian offshore oil blocks controlled by the ailing Brazilian oil company OGX, saying it would wait for a court decision on OGX’s bankruptcy filing last month before deciding on the plan.
OGX has said that it expected to end up in arbitration over the deal with Petronas.
For the three months ended September, Petronas posted a 16% rise in net profit from a year ago to 14.47 billion Malaysian ringgit ($4.52 billion), helped by higher demand for crude and a return to production in South Sudan.
Total quarterly domestic and international output reached 2.06 million barrels of oil equivalent, up from 1.90 million a year ago, as the Fortune 500 company resumed operations in South Sudan and ramped up output in Malaysia, Iraq and Canada.
In the first nine months of the year, production was up 6% from the corresponding year-ago period.
“For this year we did not see any production coming out of South Sudan but we were given a surprise,” Shamsul said, adding that higher production levels and foreign exchange gains were expected to boost results for the full year.