SapuraOMV Upstream’s main assets include a 40% operated interest in block SK408 containing the Jerun gas field and a 30% operated interest in block SK310, both situated offshore Sarawak in Malaysia
TotalEnergies to acquire Sapura Energy’s 50% stake in SapuraOMV Upstream. (Credit: QR9iudjz0 from FreeImages)
TotalEnergies is set to take full ownership of SapuraOMV Upstream by acquiring the remaining 50% in the Malaysian gas producer and operator through a $530.3m deal with Sapura Upstream Assets, a fully owned subsidiary of Sapura Energy.
Earlier this year, TotalEnergies signed a deal with Austrian oil and gas firm OMV to acquire the latter’s 50% stake in SapuraOMV Upstream for $903m.
Both the deals are contingent on preceding conditions such as regulatory approvals. The closing of the OMV deal is expected by the end of the first half of 2024 while the latest deal is likely to be finalised in the second half of this year.
TotalEnergies chairman and CEO Patrick Pouyanné said: “Following the transaction with OMV announced two months ago and this new transaction with Sapura Upstream Assets, TotalEnergies will have full ownership of SapuraOMV and become a significant gas operator in Malaysia.
“The SapuraOMV assets are fully in line with our strategy to grow our gas production to meet demand growth, focusing our portfolio on low-cost and low-emission assets. We look forward to strengthening our global partnership with Petronas in Malaysia, a country where we see further development opportunities for our Company.”
SapuraOMV Upstream’s primary assets include a 40% operated interest in block SK408 and a 30% operated interest in block SK310, both situated offshore Sarawak in Malaysia.
In 2023, SapuraOMV Upstream’s operated production reached approximately 500,000 cubic feet per day (500Mcf/d) of natural gas, supplying the Bintulu LNG plant operated by Petronas, along with 7,000 barrels per day (7kb/d) of condensates.
The development of the Jerun gas field in block SK408 remains on schedule for a launch in the latter half of 2024. Additionally, SapuraOMV Upstream holds exploration licenses in Malaysia, Australia, New Zealand, and Mexico, with a discovery made last year on block 30.
Sapura Energy said that it has been actively seeking to divest its stake in SapuraOMV Upstream as part of its restructuring efforts to manage its unsustainable debt and outstanding payments.
The net proceeds from the divestment will primarily be used to settle the amounts owed to Sapura Energy’s scheme creditors, which include its lenders from the multi-currency financing arrangements.
Sapura Energy Group CEO Datuk Mohd Anuar Taib said: “We are pleased with the outcome of this divestment, which we believe is fair and equitable.
“With full ownership of SapuraOMV, we are confident that TotalEnergies will provide the right focus to further develop the growth potential of its assets. This portfolio rationalisation marks our strategic shift away from the Exploration & Production business, as we enhance our core capabilities to deliver innovative solutions to the dynamic energy industry.”