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Pertamina acquires Murphy's Malaysian assets for $2 billion
State-owned energy company PT Pertamina will acquire 30 percent of US-based Murphy Oil Corporationâs Malaysian oil and gas assets for US$2 billion by the first quarter next year, a transaction that underlines the companyâs commitment to expanding its business overseas
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tate-owned energy company PT Pertamina will acquire 30 percent of US-based Murphy Oil Corporation's Malaysian oil and gas assets for US$2 billion by the first quarter next year, a transaction that underlines the company's commitment to expanding its business overseas.
Pertamina spokesman Ali Mundakir said on Wednesday that Pertamina was finalizing the process, with the acquisition expected to be completed in the first quarter of 2015.
'I can confirm that we have reached a deal to acquire 30 percent of Murphy's offshore assets in [Malaysian states] Sabah and Serawak,' he said.
Pertamina, through its subsidiary PT Pertamina Malaysia Eksplorasi Produksi, will pay $2 billion in cash for the assets, Murphy Oil announced on its website on Tuesday.
The US-based company revealed that the effective date of the transaction would be Jan. 1 2015, with closing expected to take place in two phases.
'The first phase is expected to be completed in the fourth quarter of 2014 and the second phase by the first quarter of 2015,' it went on.
The firm stated, however, that the transaction was subject to, among other things, the approval of Malaysia-owned Petroliam Nasional Bhd. (PETRONAS).
Murphy Oil's Malaysian oil and gas assets have become core assets for the company, accounting for more than 40 percent of the firm's total net production last year.
- Cash transaction to be completed early next year
- Murphy Oil's Malaysian operation producing around 86,000 boepd
- Acquisition demonstrates Pertamina's overseas ambitions
The firm's data showed that its Malaysian operation last year produced about 86,000 barrels of oil equivalent per day (boepd), and booked total proven reserves of 125 million barrels of oil and 406 billion cubic feet.
Murphy Oil president & CEO Roger W. Jenkins said in a statement that the transaction marked the value of the high-margin and long-term assets in his firm's Malaysian business.
'This transaction allows us to redeploy the proceeds through an individual or combination of strategic and financial initiatives such as increased drilling capital in the Eagle Ford Shale, acquisition opportunities, debt reduction and share repurchases,' he said.
Besides Pertamina, Vietnamese oil and gas firm Petrovietnam and Kuwaiti firm Kuwait Foreign Petroleum Exploration Co. have also bid for a stake in Murphy's Malaysian assets, offering over $1.5 billion and about $2 billion, respectively, Reuters previously reported.
Murphy Oil and other US oil companies are reducing overseas holdings as oil and gas exploration prospects improve in their home country.
Pertamina, meanwhile, is expanding its overseas operation to boost its output, which has been declining for years.
Pertamina's senior vice president for upstream business development, Denie Tampubolon, previously told The Jakarta Post that Pertamina was assessing five overseas blocks that could be taken over next year.
Pertamina has been expanding overseas since January 2002 when it signed a cooperation contract in Block 10 and 11.1 in Vietnam with a government-to-government cooperation model. The next was Block SK-305 in Malaysia, acquired in 2003, followed by Block 3 Western Desert Iraq, Block 13 Red Sea in Sudan and three blocks in Qatar: Block 123-3 Sirte Onshore, Block 17-3 Sabratah Offshore and Block 3 Offshore.
Pertamina is aiming to book 554,710 boepd in oil and gas production this year, higher than last year's 465,220 boepd.
Of this year's total, the firm is aiming for 63,000 boepd to come from its overseas fields, a figure it hopes to increase almost tenfold to 600,000 by 2023.
