US energy firm ExxonMobil is weighing the divestment of its offshore oil assets in Malaysia as part of its global divestiture programme.
The firm is working with an adviser on the potential divestiture,which if it materialises could fetch it anywhere between $2bn and $3bn, reported Bloomberg, citing people familiar with the matter. Currently, the firm’s focus is to divest upstream assets operated under production-sharing contracts with state-run Petronas.
In an emailed statement, the firm told Bloomberg: “ExxonMobil is testing market interest for a number of assets worldwide, including its participating interest in producing assets in Peninsular Malaysia.
“No agreements have been reached and no buyer has been identified. Our operations will continue as normal throughout the marketing process.
This move comes after Exxon’s $4.5bn agreement last month to divest production assets in Norway and its plan to put up its assets in Australia on the sale. These are considered to be part of the measures to turnaround the firm following stagnant production for years and a lower stock-price compared to competitors.
In Malaysia, the firm generates oil and gas under four production-sharing contracts (PSC) with Petronas. Among its assets in the country include a 30% stake in the offshore Tapis Blend region, from where it generates low-sulfur crude.
The PSCs consist of 2.4 million acres of offshore area, with exploration and production terms for up to 38 years. Its divestiture plans, however, are not expected to impact its two global support centres operated in Kuala Lumpur as well as its polyethylene business.
The Malaysian energy sector has seen a number of deal activities in the recent past. In April 2019, Petronas agreed to acquire interests in two offshore Brazilian oil assets from Petroleo Brasileiro for $1.29bn. Recently, PTT Exploration & Production signed an agreement to acquire Murphy Oil’s oil and gas assets in Malaysia for $2.1bn.