Indian Oil in talks to buy Petronas’ 10% stake in Canadian gas asset1 min read . Updated: 12 Nov 2013, 08:24 PM IST
Petronas is seeking between $1.1 billion to $1.5 billion for its 10% stake in the Canadian asset, say sources
“Talks have been held but they are far from being concluded. In fact, there have been disagreements between the IOC and Petronas over the price and had almost broken down," people with direct knowledge of the development said. Petronas is seeking between $1.1 billion to $1.5 billion for its 10% stake in Canada’s Progress Energy Resources Corp.
Chief executive officer of Petronas, Shamsul Azhar Abbas, said in Kuala Lumpur on Tuesday that the company was close to selling a stake in its Canadian shale gas assets to an Indian company. People in the know of the matter, however, said there was no certainty that the deal will be concluded as differences over valuation persist.
The Malaysian firm, through its wholly-owned subsidiary Petronas International Corp., had in 2011 bought Canada’s Progress Energy Resources Corp. in a Canadian Dollar 5.2 billion deal to get the Altares, Lily and Kahta shale gas assets in north-eastern British Columbia. In March this year, it sold a 10% stake in its planned liquefied natural gas facility and shale gas project to Japan Petroleum Exploration Co. (Japex).
The Malaysian firm is planning to build a liquefied natural gas terminal off Canada’s Pacific Coast, aimed at exporting natural gas to Asian markets. Progress Energy has more than 1.9 trillion cubic feet of proved and probable gas reserves in British Columbia.
IOC’s plan to take 10% will also include an offtake agreement for the Indian energy company. IOC is looking to expand its protfolio of exploration and producing assets while Petronas wants to share some of its costs. Sources said the details of deal between IOC and Petronas have not yet been finalised as negotiations are far from being concluded.
IOC, which had previously ventured into overseas oil and gas exploration and production with state-owned explorer OIL India Ltd, is currently talking to Petronas alone. There has been no decision so far on talking OIL on board for the acquisition. Shares of IOC closed at ₹ 198.85, down 2.12% on the Bombay Stock Exchange.