Petronas sells 3% stake in Canada shale gas project to Brunei

PETALING JAYA: Petroliam Nasional Bhd (Petronas) has secured a second investor for its Canadian shale gas project with the sale of a 3% stake in Progress Energy Canada Ltd to Brunei’s national oil company.
The deal also involved PetroleumBRUNEI buying 3% of the liquefied natural gas (LNG) production from the proposed Pacific NorthWest LNG Ltd’s export facility for a minimum period of 20 years.
Petronas last year bought Progress Energy in a C$5.2bil (RM15.7bil) deal that provides the national oil company shale gas assets in north-eastern British Columbia.
With the latest sale, Petronas now hold 87% of Progress Energy. It had earlier this year sold a 10% equity interest in the project to Japan Petroleum Exploration Co.
The latest deal, one of five agreements signed between Petronas and PetroleumBRUNEI on Sunday night in Bandar Seri Begawan, was witnessed by Prime Minister Datuk Seri Mohd Najib Tun Razak and Sultan Hassanal Bolkiah.
Najib later told a press conference that a significant large oil and gas deposits had been discovered in new exploration fields off the maritime waters of the Sarawak-Brunei-Sabah region.
“One of the most important and fruitful result that has come from this meeting is the commercial arrangement reached in the exploration and exploitation of oil and gas,’’ Najib said.
The agreements are a head of agreement (HOA) towards formalising a unitisation arrangement for Malaysia’s Kinabalu West NAG field and Brunei’s Maharajalela North Panel field and a HOA towards a provisional arrangement for joint development of Malaysia’s Gumusut/Kakap field and Brunei’s Geronggong/Jagus-East field.
There are also two production sharing agreements (PSA) awarded by PetroleumBRUNEI to Petronas Carigali Brunei Ltd and Shell Deepwater Borneo Ltd for Brunei’s offshore Blocks N and Q.
“Petronas will also be looking at the exploration of oil and gas in blocks N and Q in shallow waters, and will also be involved in increased activities in the field at CA 1,” Najib said.
He said the unitisation of gas projects at the border of both countries (between Limbang and Brunei) had been successfully negotiated, adding that drilling and production would happen by the end of the first quarter of next year, further boosting oil and gas reserves.
“Both countries have also agreed to hasten the land boundary demarcation (at the Brunei-Limbang border region),” he added.
A memorandum of understanding (MOU) was also signed between Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) with PB Services Sdn Bhd towards a possible joint venture for the provision of engineering and fabrication services.
In a statement, Petronas said the HOA for Malaysia’s Kinabalu West NAG field and Brunei’s Maharajalela North Panel field paved the way for the two parties to resolve a number of issues relating to the unitisation and future development of these straddling fields.
The second HOA, it added, was based on a provisional production and cost sharing arrangement until a further agreement was reached on the status of the fields.
As for the PSAs, the two partners have equal 50:50 equity interests in the two blocks, where Petronas Carigali Brunei is the operator of Block N while Shell Deepwater Brunei operates Block Q, according to a Petronas’ statement.
Meanwhile, the MOU between MMHE – a unit of Petronas’ subsidiary MISC Bhd – and PB Services was to explore the possibility of setting up a 30:70 joint venture to provide engineering and fabrication services, Petronas said.