Exxon Mobil is leaving Malaysia: Petronas takes over assets

Exxon Mobil Corp, a major US oil and gas company, has decided to sell its Malaysian operations to state-owned energy firm Petronas. The move will see Exxon Mobil definitively withdraw from the Malaysian upstream sector where it once dominated. According to sources close to the situation, the move is part of a broader strategy to target oil production in the Americas.

History and context

Exxon Mobil $XOM has operated in Malaysia for 130 years, during which time it has become a key player in the market. However, the company has been looking to sell its aging assets in the country since 2020, which is in line with its strategy of shifting its focus to the Americas. Petronas, Malaysia's state-owned energy firm, has now taken over Exxon's operations, including the major Tapis oil field in Terengganu, which began production in 1978.

Details of the transaction

Although terms of the deal were not immediately disclosed, sources confirmed that Exxon employees will be transferred to Petronas. Petronas and Exxon Mobil have not officially commented on the transaction.

Significance of Exxon in Malaysia

Despite the asset sale, Exxon Mobil remains a significant energy producer in Malaysia. The company said on its website on 12 November 2023 that it contributes approximately 40% and 50% of the oil and gas production in Peninsular Malaysia. Exxon Mobil operates 35 oil and gas platforms in 12 fields offshore Terengganu and has interests in another 10 platforms in five fields in the South China Sea.

Production and investment

Exxon's combined operations produce about 15% of Malaysia's oil and condensate, or about 600,000 barrels per day, and more than half of the natural gas in the Malaysian Peninsula, or over 2 billion cubic feet per day. Exxon's last major investment in the country was $2.5 billion in the Tapis field enhanced oil recovery project, which began in late 2014.

Conclusion

The move marks the end of an era for Exxon Mobil in Malaysia and also represents a significant expansion for Petronas in the region. The sale of these assets reflects broader strategic changes in the global energy sector, where companies are adapting to new market conditions and changing their geographic focus.

Source: Yahoo Finance, CNN.

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