Murphy's Potential Sale of Upstream Assets in Malaysia Attracts Local Firms

Murphy Oil Corp. may divest as much as 30 percent interest in its upstream oil and gas assets in Malaysia for $2 billion to $3 billion (MYR 6.62 bilion to MYR 9.93 billion), according to industry sources quoted in local daily The Star Friday.

The proposed sale has generated interests from Malaysian companies, including SapuraKencana Petroleum Bhd, Hibsicus Petroleum Bhd, Sona Petroleum Bhd and CLIQ Energy Bhd, as well as Southeast Asia-focused Coastal Energy Co., which is owned by Condor Acquisition (Cayman) Ltd., a banker told The Star.

Condor is an entity controlled by Spain's CEPSA and in which Strategic Resources (Global) Ltd. - a vehicle of Malaysian businessman Larry Low Hock Peng - is an investor.

Murphy commenced operations in Malaysia in 1999 and its upstream assets in the country accounted for over 45 percent, or about 89,000 barrels of oil equivalent per day (MMboepd), of the firm's total net production in 2012.

The company has majority interests in five separate production sharing contracts (PSCs) in Malaysia: Block K, Block H, SK 309, SK 311 and SK 314A. Murphy also has three gas holding agreements in PM 311. Murphy has booked total proved reserves of 95.7 million barrels of oil and 357.6 billion cubic feet in Malaysia, data from the firm's website indicated.

Murphy's plan to trim its stakes in Malaysian upstream assets comes soon after SapuraKencana completed its acquisition of Newfield Exploration Company's upstream assets in the country earlier this month for $895.9 million.


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