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etroliam Nasional Bhd., Malaysia’s state oil company, says it is assessing potential partners to help develop an Indonesian gas field after conducting a viability review of its global investment portfolio.

The Kuala Lumpur-based company, also known as Petronas, issued a statement countering claims by the chairman of Indonesia’s oil and gas regulator, BPMigas, that it will pull out from developing the Kepodang field. The site, which lies within the Petronas-operated Muriah block 180 kilometers (111 miles) from Semarang, would require an investment of as much as US$400 million, Indonesian upstream oil and gas regulator BPMigas Chairman R. Priyono said last week.

“Petronas will continue with the development in line with its production-sharing contract,” the Malaysian company’s statement said as reported by Bloomberg.

The Malaysian company said it was already in the process of assessing potential partners for Kepodang. “Petronas is now in discussion with BPMigas and other stakeholders to arrive at an equitable solution that brings value to all parties.”

Shamsul Azhar Abbas has been conducting an overhaul of Petronas’ operations since becoming chief executive officer in February 2010, placing greater priority on developing Malaysia’s domestic oil and gas fields to help extend the country’s maturing reserves.

“Like other oil and gas companies, Petronas continues to review the company’s investment portfolio worldwide to ensure and enhance sustainability and profitability,” Monday’s statement from the company said.

Petronas acquired its production-sharing contract for Muriah in 2004. The Kepodang field will supply gas to the Tambak Lorok power plant in Central Java with sales and transportation agreements expected to be concluded this month, it said.

Indonesian downstream oil and gas regulator BPH Migas said recently the Kepodang field would begin gas supply to the Tambaklorok power plant in late 2013 after the government resolved its difference with Petronas on the construction of the field’s pipeline network, an energy official said.

State electricity company PT PLN has said that the gas supply from the Kepodang gas field, operated by Malaysia-based Petronas Carigali, might begin far behind schedule due to the involvement of Bakrie & Brothers in the pipeline project. The field was previously scheduled to start its gas supply to the Tambaklorok power plant in late 2011.

In 2008, PLN made an agreement with Petronas that it would receive 354 billion cubic feet (bcf) of gas until 2021. According to the initial plan, the pipeline would be built by Petronas as part of its contract in the operation of the Kepodang gas field.

In 2009, Bakrie & Brothers, the operator of the Kalimantan-Java gas pipeline project, proposed to build the pipeline network from the Kepodang field to the Tambaklorok Power Plant as part of the company’s Kalimantan-Java pipeline project.

After a series of negotiations held in late 2010, the government approved Bakrie & Brothers’ proposal and an early estimation suggested that the company would start the gas delivery in the fourth quarter of 2014. BPMigas said earlier that the involvement of Bakrie & Brothers in the pipeline project had sparked a small amount of friction between the government and Petronas, but after a series of mediation meetings, the problems were solved. The agency said the government might save more money allowing Bakrie & Brothers to construct the pipeline because it should not pay cost recovery as would be the case if Petronas built the pipeline.