Repsol has agreed to divest its exploration and production (E&P) assets in Malaysia and Vietnam, to Hibiscus Petroleum.
The sale includes the Spanish oil company’s 35% stake in PM3 commercial arrangement area (CAA) production sharing contract (PSC), and a 60% interest in 2012 Kinabalu Oil PSC.
Hibiscus Petroleum’s fully owned subsidiary will also acquire Repsol’s 60% stake in PM305 PSC, 60% interest in PM314 PSC, and 70% stake in Block 46 CN in Vietnam.
Financial terms of the deal have not been made public.
The company said that the upstream assets considered for sale represent about 2% of its current net output globally.
The divestment is a part of the Spanish firm’s efforts to rationalise its global portfolio by reducing its presence from 25 to 14 core countries.
Under the 2021-2025 Strategic Plan, Repsol aims to focus on the geographic areas that have the most competitive advantages.
Proceeds from the sale and the resulting CapEx savings will be used by the firm to fund core projects and new low-carbon initiatives.
The Spanish firm has already divested its cessation of oil production activities in Spain, producing assets in Russia, and exploratory activity in other countries.
The latest deal is due to receive regulatory approval and is subject to the waiver of partners’ preemption rights.
Repsol expects the divestment to allow it to focus its upstream activity on 14 key projects that are centred around producing basins.
Earlier this year, Repsol formed an industry alliance with Petrofac, Sinopec Resources UK and TechnipFMC to maximise oil and gas recovery from the UK Continental Shelf (UKCS).
The firms agreed to jointly offer subsea and topsides engineering, project management and operating expertise to create a complete offering, from the wellhead to export route.