TotalEnergies becoming sole owner of Malaysian firm to boost gas production

France’s energy giant TotalEnergies has taken steps to bolster its overall gas production offshore Malaysia by signing a deal with Sapura Upstream Assets to obtain its entire stake in SapuraOMV Upstream – a 50:50 joint venture between Sapura Energy and Austria’s OMV – which is a Malaysian independent gas producer and operator.

The deal with Sapura comes after TotalEnergies inked a similar one with OMV to acquire its 50% interest in SapuraOMV. Thanks to the agreement to get Sapura’s 50% interest, the French giant will own 100% of SapuraOMV, following the completion of both transactions, which are subject to some conditions precedent, such as regulatory approvals.

Sapura’s part of the business will be acquired for a consideration of $530 million, subject to closing adjustments. This acquisition is expected to be completed in the second half of 2024. TotalEnergies will now be able to own SapuraOMV’s main assets in full, encompassing 40% operated interest in block SK408 and 30% operated interest in block SK310, both located offshore Sarawak in Malaysia.

“Following the transaction with OMV announced two months ago and this new transaction with Sapura Upstream Assets, TotalEnergies will have full ownership of SapuraOMV and become a significant gas operator in Malaysia,” highlighted Patrick Pouyanné, Chairman and CEO of TotalEnergies.

“The SapuraOMV assets are fully in line with our strategy to grow our gas production to meet demand growth, focusing our portfolio on low-cost and low-emission assets. We look forward to strengthening our global partnership with Petronas in Malaysia, a country where we see further development opportunities for our company.”

The Malaysia firm’s production was about 500 Mcf/d of natural gas in 2023, feeding the Bintulu LNG plant operated by Petronas, and 7 kb/d of condensates. TotalEnergies explains that the development of the Jerun gas field on block SK408 is on track for a start-up in the second half of 2024. SapuraOMV also holds interests in exploration licenses in Malaysia, Australia, New Zealand, and Mexico, where a discovery was made in 2023 on block 30.

TotalEnergies, which owns interests in two PSCs in the exploration phase in Malaysia, signed in June 2023 an agreement with Petronas and Mitsui to develop a carbon storage project in Southeast Asia and evaluate several CO₂ storage sites in the Malay Basin.

The French energy giant is currently working on multiple developments, including a recently sanctioned LNG project in Oman, which combines fossil fuel production with renewable energy generation, enabling LNG and solar to tie the knot.

Since this LNG project is expected to serve as the first LNG bunkering hub in the Middle East, TotalEnergies highlights that the development spotlights an available and competitive alternative marine fuel to reduce the shipping industry’s emissions.