Exxon Mobil to Sell Malaysian Oil and Gas Assets to Petronas

According to two people with direct knowledge of the matter, Exxon Mobil Corp has decided to sell its Malaysian oil and gas assets to state energy firm Petronas, marking its exit from the country’s upstream sector, where it once was a dominant producer.

The U.S. major, which marked its 130th year in Malaysia last year, has been trying to sell its aging upstream assets since 2020 as part of a strategy shift to focus on oil production in the Americas.

Transfer of Operations:

According to three sources, Petronas has taken over the operations of Exxon’s assets, including the country’s flagship Tapis oilfield in Terengganu, which began production in 1978. Exxon’s staff will be transferred to Petronas as part of the deal.

Petronas stated that its subsidiary, Petronas Carigali Sdn Bhd, is currently engaged in discussions with ExxonMobil Exploration and Production Malaysia Inc regarding the transfer of operations for two production-sharing contracts located offshore peninsular Malaysia.

“The discussions are subject to further agreements between both parties,” Petronas said in response to a Reuters query. “Petronas Carigali remains committed to safe operations, as well as maintaining reliable and uninterrupted energy supply for our customers throughout the process.” ExxonMobil did not react to requests for comment. The terms of the deal were not immediately known.

Exxon’s Presence in Malaysia:

In an article posted on its website dated November 12, 2023, Exxon said it remained a significant energy producer in Malaysia, contributing about 40% and 50% to Peninsular Malaysia’s crude oil and natural gas production.

The company employs 35 oil and gas platforms in 12 fields offshore Terengganu and has a working interest in another 10 platforms in five fields in the South China Sea.

The combined operations produce about 15% of Malaysia’s crude oil and condensate, 600,000 barrels daily, and more than half of peninsular Malaysia’s natural gas, over 2 billion cubic feet per day.

Last Major Investment:

Exxon’s last major investment in the country was a $2.5 billion enhanced oil recovery project at the Tapis field, which started up in late 2014.