Potential sale reflects broader trend
The potential divestment, which could raise about US$1 billion (RM4.23 billion), comes as Petronas continues to reshape its international upstream portfolio in line with long-term strategic priorities and shifting global energy dynamics, they added.
It was reported that the national oil company was working with Bank of America Corp to market its 50 per cent stake in the offshore deepwater oilfield in Brazil's Campos Basin.
The Tartaruga Verde field is operated by Brazil's national oil company Petrobras, which owns the remaining 50 per cent.
Economist Samirul Ariff Othman said Petronas is in the midst of restructuring its upstream portfolio to boost resilience, prioritise value creation and ensure long-term sustainability in the face of market and geopolitical uncertainties.
The strategy involves focusing on assets with strong break-even economics while minimising the group's presence in regions with elevated risk.
"In recent years, the company has prioritised monetising non-core assets and reinvesting in areas aligned with its long‑term strategy, including unconventional resources in Argentina and Canada, and focused conventional assets in Brazil, Mexico, Turkmenistan, Iraq and Vietnam.
"Selling the 50 per cent stake reflects this approach: monetising an offshore minority interest acquired in 2019, freeing capital for re-investment in more core or higher-return geographies," he told Business Times.
Samirul said the national oil and gas company has been steadily withdrawing from non-core or higher-risk international assets as part of its portfolio optimisation strategy.
"Ongoing divestments across Africa, including exits from Chad and South Sudan, align with re-focusing efforts.
"Earlier moves included exiting Venezuela and underperforming European ventures, emphasising a pivot toward higher-grade, lower-risk upstream opportunities," he added.
He added that the move to divest the Brazil stake aligns with Petronas' long-term strategy of shedding non-core offshore assets in order to redirect capital towards key operations and minimise geopolitical or operational risks.
Samirul said the reported Petronas move to engage Bank of America to market its Tartaruga Verde stake reflects its ongoing strategic shift, streamlining its upstream portfolio in line with the 2024-2026 Activity Outlook, while redirecting capital toward assets with better break-even performance and stronger alignment with its Net Zero 2050 goals.
Similarly, Universiti Teknologi Mara Business Management Faculty senior lecturer Dr Mohamad Idham Md Razak said Petronas' potential exit from the Brazilian asset is consistent with a wider realignment seen across the oil and gas industry.
"This divestment aligns with strategic shifts aimed at reallocating resources towards more lucrative or strategically aligned assets.
"The Brazilian offshore asset, while potentially profitable, might present operational challenges or uncertainties such as geopolitical risks, currency fluctuations, or regulatory complexities that make it a candidate for divestment," Idham said when contacted.
He said the move could form part of a wider strategy to restructure Petronas' portfolio in line with global energy transition trends, potentially unlocking capital for renewable energy investments or higher-yield hydrocarbon projects in other regions.
"Petronas' potential exit from international assets, such as the Tartaruga Verde oilfield, could be indicative of a strategic refocusing or a risk-aversion strategy in response to the evolving global energy landscape.
"This trend might reflect a broader industry recalibration where companies, in the wake of the pandemic's economic impact and shifting towards cleaner energy sources, are divesting from assets that are either less profitable or do not align with their long-term strategic objectives," he added.
Idham said this could be part of a larger trend of asset reallocation to support domestic energy security and decarbonisation efforts.
"However, this does not necessarily imply a complete retreat from international ventures, as state-owned enterprises often have mandates to secure energy resources globally, and strategic disinvestments could be offset by new investments or partnerships in more geopolitically stable or strategically important regions," he explained.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
9 minutes ago
- New Straits Times
Palm falls on concerns over rising output, stocks
KUALA LUMPUR: Malaysian palm oil futures fell on Thursday, extending losses from the previous session, amid concerns over rising inventories and production, while weak export demand further pressured the market. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange shed RM29, or 0.68 per cent, to RM4,238 (US$1,003.08) a metric ton at the midday break. Crude palm oil futures traded lower on ongoing concerns over rising output and stocks in the coming weeks, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd. "The recent weak export demand is also seen as weighing down on market sentiment." Cargo surveyors estimated July palm oil exports to have fallen between 6.7 per cent and 9.6 per cent. The Malaysian Palm Oil Board is scheduled to release its supply and demand data on Aug 11. Dalian's most-active soyoil contract rose 0.36 per cent, while its palm oil contract shed 0.42 per cent. Soyoil prices on the Chicago Board of Trade (CBOT) gained 0.11 per cent. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market. Oil prices rose 1 per cent, pausing a five-day losing run, on signs of steady demand in the US, the world's biggest oil user, though uncertainty about the macroeconomic impacts of US tariffs limited gains. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. Indonesian goods exported to the US will attract a 19 per cent tariff from Aug 7, although the country is still negotiating exemptions for some of its key exports, such as crude palm oil. The ringgit, palm's currency of trade, strengthened 0.05 per cent against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
New Straits Times
9 minutes ago
- New Straits Times
Rupee likely to hold ground after Trump ramps up tariff heat on Indian goods
MUMBAI: The Indian rupee is expected to open largely unchanged on Thursday, showing limited reaction to US President Donald Trump's additional tariffs on Indian goods, which traders said was largely expected and factored in. The 1-month non-deliverable forward indicated the rupee will open in the 87.70-87.75 range versus the US dollar, largely unchanged from Wednesday's close of 87.7325. Indian equities too appeared largely unfazed by the additional tariffs, with GIFT Nifty futures pointing to a muted open. On Wednesday, Trump hit Indian goods with an extra 25 per cent tariff, blaming oil ties with Russia. The new duties, kicking in on August 28, could lift tariffs on some exports to 50 per cent - one of the steepest rates for a US trade partner. "We knew more tariffs were coming after all those hints by Trump," a currency trader at a private sector banks said. It appears that the rupee and Indian equities had largely priced them in, he added. The rupee's measured response to the new tariffs likely reflects the Reserve Bank of India's (RBI) resolve to prevent a breach of the all-time low of 87.95, the trader said. The central bank was likely selling dollars via state-run banks on Tuesday when the currency was at risk of slipping past that level. India-US trade relations have entered a turbulent phase, marked by escalating tariffs and the US's unease over New Delhi's continued energy engagement with Russia. The developments have raised concerns about higher volatility in Indian assets, with investors bracing for the fallout from worsening relations. The additional tariffs were not "entirely unexpected", especially since Trump had recently threatened substantial tariffs on India, Barclays Bank said, adding that if implemented in full, would "certainly dent India's growth outlook". However, the bank added that the announcement likely represents a pressure tactic and expects the final US duty on Indian goods to settle lower.
The Sun
9 minutes ago
- The Sun
Malaysia's semiconductor exports exempt from US tariffs for now
KUALA LUMPUR: The Ministry of Investment, Trade and Industry (MITI) has clarified that Malaysia's semiconductor exports to the United States are still exempt from reciprocal tariffs. The exemption remains in place but could change depending on ongoing US policy reviews. MITI Minister Tengku Datuk Seri Zafrul Abdul Aziz said the US is investigating semiconductor imports under Section 232 of its Trade Expansion Act of 1962. The probe aims to assess whether these imports threaten US national security. Originally set to conclude by December, the investigation has been expedited, with results guiding potential actions like higher tariffs. Tengku Zafrul addressed concerns during the Dewan Rakyat's Minister's Question Time session. He responded to queries from Lim Guan Eng (Bagan-PH) about reports of a possible 100 per cent tariff on semiconductors from non-US producers. Malaysia is engaging directly with US trade officials to seek clarity and protect exporter interests. If tariffs are imposed, Malaysian products could lose competitiveness in the US market. The US has yet to finalise the tariff implementation mechanism. Current exemptions apply to companies investing in the US, not specific countries. This means the impact hinges on the operations of foreign firms in Malaysia. Tengku Zafrul noted that 65 per cent of Malaysia's semiconductor exports to the US come from American companies based locally. - Bernama
