Thursday 28 Mar 2024
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KUALA LUMPUR (Oct 8): Petroliam Nasional Bhd (Petronas) confirmed on Friday the company has reached an agreement with LUKOIL for the proposed sale of Petronas' Azerbaijan business interests which include Petronas' entire 15.5% stake in the Shah Deniz natural gas project in the Azerbaijan sector of the Caspian Sea for US$2.25 billion (about RM9.41 billion) following Petronas' continuous review of its business portfolio to ensure a better fit in its growth strategy in the increasingly evolving energy landscape.

In a statement to theedgemarkets.com, Petronas said Lambert Energy Advisory Ltd is advising Petronas on the proposed transaction which is expected to be effective from Jan 1, 2022.

"The transaction is currently pending regulatory approvals and fulfilment of conditions precedent. More information will be disclosed upon its completion," Petronas said.

Petronas' statement on Friday was in response to theedgemarkets.com's emailed request to seek confirmation on the Malaysian national oil company's planned stake sale in the Shah Deniz natural gas project for US$2.25 billion to Russian oil and gas company LUKOIL.

At US$2.25 billion, the 15.5% stake sale values the entire Shah Deniz project at US$14.52 billion, according to calculations by theedgemarkets.com.

Petronas, however, did not say how it plans to to use the proceeds from the stake sale.

LUKOIL initially announced the transaction on Thursday (Oct 7).

In a statement, LUKOIL said the transaction's completion is subject to fulfilment of conditions precedent, including approval by SOCAR, the State Oil Company of Azerbaijan.

"Following completion of the sale, LUKOIL's interest in the project will increase from 10% to 25.5%. The other parties to the project are BP (operator, 28.8%), TPAO (19%), SOCAR (10%), NICO (10%), and SGC (6.7%)," LUKOIL said.

According to news reports, Petronas in 2014 bought the 15.5% stake in the Shah Deniz natural gas project from Norway-based Statoil, which is now known as Equinor ASA, for US$2.25 billion.

Edited ByChong Jin Hun
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