KUALA LUMPUR (Dec 12): Petroliam Nasional Bhd's (Petronas') proposed sale of its entire 15.5% stake in the Shah Deniz natural gas project in the Azerbaijan sector of the Caspian Sea to Russian oil and gas company LUKOIL for US$2.25 billion has been amended and revised to a disposal of a 9.99% stake instead, for US$1.45 billion (about RM6.11 billion), following negotiations with Shah Deniz project partners on the implementation of pre-emptive rights related to the project, according to LUKOIL.
In a statement on Friday (Dec 10), LUKOIL announced the signing of amendments to the agreement concluded in October 2021 on the acquisition of an additional stake in the Shah Deniz project from Malaysian national oil company Petronas.
"In accordance with the new arrangements, the share (to be) acquired by LUKOIL is reduced from 15.5% to 9.99%, with (a) proportional decrease in the transaction value from US$2.25 billion to US$1.45 billion.
"The conclusion of the amendments resulted from negotiations with the Shah Deniz project partners on (the) implementation of pre-emptive rights.
"The deal is expected to be closed in January 2022. LUKOIL's share in the project is currently 10%," LUKOIL said.
LUKOIL however did not explain as to how the implementation of pre-emptive rights related to the project had led to the revision of the proposed Petronas-LUKOIL transaction.
In corporate terminology, pre-emptive rights offer shareholders of a company the abiliity to acquire new shares in the firm in proportion to their current stakes in the company, to prevent ownership dilution.
At US$1.45 billion, Petronas' planned sale of the 9.99% stake in the Shah Deniz project values the entire project at about US$14.51 billion.
At the time of writing on Sunday (Dec 12, 2021), Petronas had not issued a statement in response to LUKOIL’s statement on the revision of the proposed Shah Deniz project share transaction between both companies.