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SapuraKencana replaces Petronas at three Vietnam offshore blocks

21st November 2014

SapuraKencana Petroleum has entered into sale and purchase agreements to acquire the entire interest of Petronas in three blocks offshore south Vietnam (Blocks 01/97 and 02/97, Blocks 10 and 11.1, and Block 46-CN) for a total purchase price of USD 400m

SapuraKencana replaces Petronas at three Vietnam offshore blocks
The acquisition is for Petronas’ interests of 50 per cent of Block 01/97 and 02/97 (Cuu Long Basin), 40 per cent of Block 10 and 11.1 (Nam Con Son Basin), and 36.85 per cent of Block 46-Cai Nuoc (Malay-Tho Chu Basin)

“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,” said Tan Sri Dato’ Seri Shahril Shamsuddin, president and group CEO of SapuraKencana Petroleum Berhad.

“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 is for Petronas’ interests of 50 per cent of Block 01/97 and 02/97 (Cuu Long Basin), 40 per cent of Block 10 and 11.1 (Nam Con Son Basin), and 36.85 per cent 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.

“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 exploration and production 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.”

SapuraKencana was selected as the winning bidder through an international and professionally managed competitive bidding process.

The economic effective date of the transaction is January 1, 2014 and SapuraKencana is entitled to net revenues from the blocks from that date. The closing of the transaction is subject to customary condition precedents including the approval of relevant government authorities.

The acquisition of three PSCs in Vietnam marks a significant milestone for SapuraKencana, further strengthening its presence in Vietnam by adding explorations and production operations to its existing service operations. 

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