SapuraKencana Petroleum Berhad will buy Petronas’ interest in three blocks offshore south Vietnam (Blocks 01/97 & 02/97, Blocks 10&11.1, Block 46-CN) for a total purchase price of $400 million.
The economic effective date of the transaction is January 1, 2014 and SapuraKencana is entitled to net revenues from these Blocks from that date, the company said in the release.
The company also added that it was selected as the winning bidder through an international and professionally managed competitive bidding process.
“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 acquisition of 3 PSCs in Vietnam marks a significant milestone for SapuraKencana, further strengthening our presence in Vietnam by adding E&P operations to our existing service operations,” SapuraKencana said.
Under the agreement, SapuraKencana will acquire Petronas’ interests of 50% of Block 01/97 & 02/97 (Cuu Long Basin), 40% of Block 10&11.1 (Nam Con Son Basin) and 36.85% of Block 46-Cai Nuoc (Malay-Tho Chu Basin).
These blocks are located primarily in shallow waters offshore South Vietnam. This acquisition adds to the Group’s reserves and resource base and increases its oil production to balance the natural decline from currently producing assets.
“We look forward to enhancing our existing ties with the Government of the Socialist Republic of Vietnam, PetroVietnam, PetroVietnam Exploration and Production and our other PSC partners to realise the full potential of the fields. The attractive Vietnamese production sharing fiscal regime and the setting within a prolific hydrocarbon region provide us an exciting opportunity for growth in Vietnam,” said Shahril Shamsuddin, President and Group CEO of SapuraKencana Petroleum Berhad.
“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,” he added.
“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,” the CEO said.