Malaysia’s Petroliam Nasional Berhad (Petronas) said its subsidiary would buy a 10 per cent stake in Oman’s Al Khazzan gas field, following a bidding exercise held by the exploration arm of state-owned Oman Oil Company.
The Petronas unit, PC Oman Ventures Ltd, would acquire the stake from Oman Oil Company Exploration and Production (OOCEP), a subsidiary of Oman Oil Company, in Block 61 of the field, which is expected to produce around 1.5 billion cubic feet of natural gas per day by 2020.
The completion of the transaction is subject to approval from the sultanate’s government and other closing conditions, OOCEP said in a statement.
Petronas is Malaysia’s fully-integrated oil and gas multinational ranked among the largest corporations on Fortune Global 500.
OOCEP, through its subsidiary Makarim Gas Development, currently holds a 40 per cent stake in Block 61, whereas the operator BP Oman holds the remaining 60 per cent.
Block 61, which includes Khazzan and Ghazeer gas fields, is one of the largest unconventional gas projects which is expected to produce around 1.5 billion cubic feet of gas daily by 2020.
“Completion of the transaction is subject to closing conditions,” Petronas said in a statement.
Max Petrov, from Wood Mackenzie’s corporate analysis team, said: “Petronas is no stranger to Oman, having held exploration acreage adjacent to Khazzan until 2014.
“The announcement highlights Petronas’ strong appetite for international business development and gas resource capture, coming less than six months after it joined Shell's LNG Canada project.
“We believe the company is buying into the project for its strong gas reserves potential. The size of resource on Block 61 means that future phases could be developed, beyond the current expansion, provided the partners can secure a buyer for the additional gas.”
Petrov added that the development would contribute 2 per cent of Petronas’ global output by 2023.