More gains in oil and gas sector
Published on: Tuesday, May 02, 2023
Hajiji said this latest acquisition was part of the Commercial Collaboration Agreement (CCA) signed between the State Government and Petronas on December 7, 2021 to enhance collaboration between the two parties in developing the oil and gas industry in Sabah.
CHIEF Minister Datuk Seri Hajiji Noor lauded Sabah’s official acquisition of 25 per cent equity in Petronas Chemicals Fertiliser Sabah Sdn Bhd (PCFS), giving State-owned SMJ Sdn Bhd (SMJ) a stake in PCFS’s world-scale ammonia and urea production facilities.This was made possible following the definitive agreements entered between SMJ and Petronas Chemicals Group Berhad (PCG), Tuesday, subsequent to the Heads of Agreement (HOA) signed on Jan 9, 2023.
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Hajiji said this latest acquisition was part of the Commercial Collaboration Agreement (CCA) signed between the State Government and Petronas on December 7, 2021 to enhance collaboration between the two parties in developing the oil and gas industry in Sabah.
“The move envisioned under the Hala Tuju Sabah Maju Jaya was to give Sabah greater revenue sharing in the oil and gas industry and augurs well for its development and economic growth,” he said in a statement on April 25.
SMJ’s Chief Executive Officer Dr Dionysia Aloysius Kibat and PCG’s Managing Director and Chief Executive Officer Ir Mohd Yusri Mohamed Yusof signed for SMJ and PCG, respectively.
PCFS was established in 2011 to construct, own and operate an integrated ammonia and urea production complex at the Sipitang Oil and Gas Industrial Park (Sogip). PCFS’s facilities are designed to produce 1.9 million metric tonnes per annum of ammonia and urea.
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It is the largest single-train ammonia and urea plant in Southeast Asia and the third largest urea plant in Asia Pacific.
Sabah has also made a significant progress through its wholly-owned company, Sabah Energy Corporation, following the signing of the agreement with Petronas in October last year, giving SEC selected downstream gas pipeline assets and supply of natural gas contracts.
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SMJ had also finalised the acquisition of a 50 per cent of non-operating participating interest in the Samarang Production Sharing Contract (PSC) through the Farm Out Agreement (FOA) with Petronas Carigali Sdn Bhd (PCSB), a wholly-owned subsidiary of Petronas recently, on April 4.
Meanwhile, in KUALA LUMPUR, Petronas Chemicals Group Bhd (PCG) said it has entered into a share purchase agreement to divest 25 per cent equity interest in its wholly-owned subsidiary Petronas Chemicals Fertiliser Sabah Sdn Bhd (PCFS) to SMJ Sdn Bhd, a Sabah State Government wholly-owned company, for RM1.25 billion.
In a filing with Bursa Malaysia on the same day, PCG said PCFS would continue to be its subsidiary upon completion of the divestment exercise, which is expected to be completed by the end of the second quarter of 2023.
“Upon completion of the divestment, PCG and SMJ shall have 75 per cent and 25 per cent of the ownership in PCFS, respectively,” said PCG.
PCG noted that the Sabah State Government had expressed its interest to own equity in PCFS since the group undertook the construction of the integrated ammonia and urea plant.
“The group had considered the State as a potential strategic partner in PCFS as the partnership would provide PCG with the ability to position itself as the preferred partner in shaping and delivering the State’s aspiration to have greater participation in the petrochemical industry.
“It also will give the opportunity to develop a robust working relationship with the state, which could unlock areas of cooperation that could derive mutual benefits,” it added.
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