Petronas not exiting Canada, group CEO reaffirms

Summary

• Petronas group CEO firmly refutes reports suggesting the company is leaving Canada, stating "Canada is not on an exit radar" and describing the country as "very resource-endowed".

• This comes after Bloomberg reported that Petronas was exploring options for its Canadian subsidiary, including potential sale or partial disposal.

• Taufik says LNG from Canada will begin shipping within the next few weeks, with regular exports to follow at an initial capacity of 25 percent.

Petroliam Nasional Bhd's (Petronas) president and group chief executive officer Tengku Taufik Tengku Kamadjaja Aziz has reiterated that the company is not exiting Canada.

“Canada is not on an exit radar. We're not exiting Canada. We are constantly entertaining overtures and proposals.

“That is going to be the natural course of business, and it (Canada) is a very resource-endowed geography,” Bernama reported Taufik (above) as saying at an editors’ briefing today.

Taufik further said liquefied natural gas (LNG) will be regularly shipped out from Canada at 25 percent, with the first cargo in a couple of weeks.

“We have 53 trillion cubic feet (TCF) of reserves. It is strategically positioned between the coasts of Canada and Japan, South Korea, Taiwan, and even China.

“Some other LNG routes are compromised by geopolitical hostility… That is another advantage. That was the rationale for doing this. We built that node. We wanted to make sure it's strategically positioned, having the locational advantage," he added.

Bernama also reported him saying that Petronas hopes to have more engagements and constructive dialogues for the national oil firm to activate additional LNG leverage in Canada.

“We hope that the Canadian (new) government will be more appreciative and supportive of it becoming a new, cleaner energy source for the rest of the developing world,” Taufik said.

He also stressed that it was crucial for Petronas to preserve its position in market share in the LNG space in Canada while also looking at how to build its upstream portfolio effectively.

Asset rationalisation

Responding to a question whether Petronas will look to liquidate some assets or diversify, Taufik said Petronas would continue its asset rationalisation to keep its operations lean.

He noted that the divestment exercise was done in Argentina as Petronas could not make its assets work in the country and found an interested party to acquire them.

In April this year, Buenos Aires-based Vista Energy reportedly acquired Petronas’ 50 percent stake in the La Amarga Chica oil field in Argentina’s Vaca Muerta shale basin for about US$1.5 billion (RM7.1 billion).

The second-biggest crude oil producer in the area will pay US$900 million upfront for the stake, with one-third of that sum financed through a loan from Banco Santander SA, while the remainder will be paid in two instalments in 2029 and 2030.

Bernama yesterday reported that Petronas denied that it would be leaving Canada.

“Any reports that claim Petronas is leaving Canada are inaccurate,” Petronas reportedly said in a reply to Bernama’s query.

On Tuesday ( June 3), Bloomberg reported that Petronas is exploring options for its Canadian subsidiary, formerly Progress Energy Resources Corp, which could include a complete or partial disposal.

Citing unnamed sources familiar with the matter, Bloomberg reported that Petronas is understood to be working with a financial adviser and has begun sounding out potential purchasers. The report said that the business could be valued at between US$6 billion and US$7 billion.

The report indicated that Petronas might also consider offloading merely a minority shareholding, depending on the bids received.

Petronas’ commitment

However, Bernama reported Petronas saying that it is committed to its investments in Canada, where it operates the North Montney Joint Venture upstream gas development and is a major partner in the LNG Canada gas liquefaction facility in Kitimat, British Columbia.

“With LNG Canada preparing for its first cargo this year, Petronas is proud to be providing lower-carbon, reliable Canadian liquefied natural gas to support global energy markets for decades to come,” Petronas was quoted as saying.

Petronas acquired Progress Energy in 2012 for approximately US$5.3 billion, significantly expanding its shale gas portfolio and strengthening its gas supply base.

Bernama also reported that the national oil company owns a 25 percent stake in the LNG Canada project, a major liquefied natural gas joint venture alongside Shell Plc, PetroChina Co Ltd, Mitsubishi Corp, and Korea Gas Corp.

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