SapuraKencana Acquires Petronas' Stakes in 3 Blocks off Vietnam for $400M
SapuraKencana Petroleum Berhad inked Sale and Purchase Agreements (SPA) to acquire the entire interest of Malaysia's national oil company Petroliam Nasional Berhad (Petronas) in three blocks offshore southern Vietnam for $400 million after an international bidding process, the firm said Thursday.
The three shallow water upstream assets are Blocks 01/97 & 02/97, Blocks 10 & 11.1 and Block 46-CN, with Jan. 1 being the economic effective date of the transaction, enabling SapuraKencana to net revenues from these blocks. The firm added that the transaction is now subject to the approval of relevant government authorities.
"The acquisition of 3 PSCs (production sharing contracts) in Vietnam marks a significant milestone for SapuraKencana, further strengthening our presence in Vietnam by adding E&P (exploration and production) operations to our existing service operations," SapuraKencana commented in a press release.
Following the acquisition, SapuraKencana will take over Petronas' 50 percent stakes in Block 01/97 & 02/97 in the Cuu Long Basin, 40 percent interest in Block 10 & 11.1 in the Nam Con Son Basin and 36.85 percent interest in Block 46-Cai Nuoc in the Malay-Tho Chu Basin.
“The attractive Vietnamese production sharing fiscal regime and the setting within a prolific hydrocarbon region provide us an exciting opportunity for growth in Vietnam...The transaction gives SapuraKencana Petroleum an immediate foothold in the promising oil provinces offshore Vietnam with cash generating assets that will be earnings accretive to the group,” Shahril Shamsuddin, President and Group CEO of SapuraKencana said.
SapuraKencana expects the acquisition to add to its reserves and resource base and increases its oil production to balance the natural decline from other currently producing assets.
“The acquisition is in line with SapuraKencana’s strategy to build a balanced portfolio of E&P assets that will give sustainable growth and visibility on its longer-term income stream. This strategy focuses on balancing exploration, development and production as well as the oil and gas contribution to reserves and resources,” Shahril added.
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