Murphy Oil has agreed to sell 30% of its Malaysian oil and gas assets to PT Pertamina Malaysia Eksplorasi Produksi for $2bn.

The transaction is subject to the approval of Malaysia’s state-owned oil and gas firm Petroliam Nasional Berhad (Petronas).

"This transaction marks the value of the high-margin, long-term assets in our Malaysian business. We are excited to strengthen our partnership with Pertamina."

The deal is expected to be completed in the first-quarter of 2015.

Murphy Oil entered the Malaysia market in 1999 and the country accounted for over 40% of the company’s net production in 2013.

The company owns majority stakes in seven separate production sharing contracts, which include Block K, Block H, Block P, SK 309, SK 311, SK 314A and three gas holding agreements in PM 311.

Murphy Oil’s Malaysia net production was around 86,000 barrels of oil equivalent per day (boepd) in 2013 with total proved reserves of 125 million barrels of oil and 406 billion cubic feet.

The company said it wants to establish a long-term partnership with Pertamina.

Murphy Oil president and chief executive officer Roger Jenkins said: "This transaction marks the value of the high-margin, long-term assets in our Malaysian business. We are excited to strengthen our partnership with Pertamina and look forward to working with them and our other partners in Malaysia.

"We will continue to evaluate all aspects of our portfolio. This transaction allows us to re-deploy 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."

Energy