Petronas Agrees to Buy

Canadas Progress Energy

By Jim Polson Jun 29, 2012 7:27 AM GMT+0800
Petroliam Nasional Bhd, Malaysias state-owned oil and natural-gas company, agreed
to buyProgress Energy Resources Corp. (PRQ) for C$4.8 billion ($4.6 billion), in
its biggest deal as it moves to export Canadian gas to Asia.
Petronas, as the Kuala Lumpur-based company is known, offered C$20.45-a-share for
Progress Energy, 77 percent more than its close before the deal. Including convertible
debentures, the deal is valued at about C$5.5 billion, Calgary- based Progress Energy
said in a statement yesterday.
Buying the company gives Petronas Chief Executive Officer Shamsul Azhar Abbas
ownership of the largest holder in the Montney shale-gas area of British Columbia and
full control of the three Progress Energy fields it bought a stake in last year as it
explores development of a liquefied natural gas export terminal. Asian buyers have
been lured to North America by gas prices that are about 88 percent cheaper.
The proposed transaction will combine Petronass significant global expertise and
leadership in developing LNG infrastructure with Progresss extensive experience in
unconventional resource development, Datuk Anuar Ahmad, executive vice president
of Petronass gas and power business, said in the statement.
Asian Investment
Progress Energy rose 74 percent to C$20.05 at the close yesterday in Toronto. Its a
record gain for the company, which had dropped 13 percent this year.
Petronas joins Asian peers including PetroChina Co., Mitsubishi Corp. and Cnooc
Ltd. in seeking production in North America. Alberta gas futures prices were $1.93 per
million British thermal units on June 27. Japan, the largest LNG
importer, paid $16.78 per million Btu including freight costsas of April 30.
Including debt, Petronas is paying 23 times earnings before interest, taxes, depreciation
and amortization. Thats 66 percent more than the average of 10 comparable deals
announced since 2003, according to data compiled by Bloomberg.
The purchase is more than double the companys biggest deal, the $2 billion
acquisition of a 40 percent stake in Santos Ltd.s Gladstone LNG project
in Australia in 2008.
Progress Energy has 1.9 trillion cubic feet of proved and probable gas reserves and
has 820,000 acres in the Montney shale-gas area. Petronass Shamsul said March 30
he was studying making an acquisition of more than $5 billion as he wants to expand
the companys presence in Canadaand Australia.
LNG Site
The companies said theyve selected a site at Prince Rupert, British Columbia, for a
potential LNG export terminal and will conduct feasibility studies. Petronas joins
groups led by Houston-based Apache Corp., Royal Dutch Shell Plc and the U.K.s BG
Group Plc in the race to export gas from Canadas West Coast.
Malaysia was the third-largest exporter of LNG in 2010, after Qatar and Indonesia,
according to the U.S. Energy Department.
The board of Progress Energy approved the offer and it has the support of the
companys senior executives and the Canada Pension Plan Investment Board, which
hold on aggregate about 25 percent of the companys shares, according to the
statement. The transaction is expected to close Sept. 25, subject to government
approval.
Petronas intends to keep all Progress Energy employees, according to yesterdays
statement.
Under the Investment Canada Act, the federal government reviews foreign acquisitions
of companies with assets valued at more than C$330 million, according to the Industry
Canada website. The government has never rejected a takeover of an energy company.
Precedents Set
There shouldnt be any blocks to the deal, said Michael Harvey, a Calgary-based
analyst for RBC Capital Markets. He rates Progress Energy shares outperform, the
equivalent of a buy, and owns none. The shareholders will vote for it and precedents
have been set, he said.
Petronas has the right to match any superior bid for Progress Energy, according to the
statement. Petronas would get a C$150 million breakup fee if the deal is terminated.
Petronas was advised by Bank of America Corp.s Merrill Lynch unit and law
firm Norton Rose Canada LLP. Progress Energy was advised by BMO Capital
Markets and its board received an independent fairness opinion from Scotia Waterous.
Burnet, Duckworth & Palmer LLP is its legal counsel.
To contact the reporter on this story: Jim Polson in New
York at jpolson@bloomberg.net
To contact the editor responsible for this story: Susan Warren
at susanwarren@bloomberg.net


04 March 2014| last updated at 11:23PM
Petronas to downsize stake in LNG project


Read more: Petronas to downsize stake in LNG project - Today's Paper - New Straits
Times http://www.nst.com.my/business/todayspaper/petronas-to-downsize-stake-in-lng-project-
1.498123#ixzz32A8PA9WV

KUALA LUMPUR: National oil company Petroliam Nasional Bhd
(Petronas) will sign an agreement to sell 10 per cent of its
liquefied natural gas (LNG) project in Canada to an Indian
company this Friday.
Its president and chief executive officer, Tan Sri Shamsul Azhar Abbas said Petronas may also sell
15 per cent stake in the Pacific Northwest LNG project to an Asian buyer by the end of this month.
However, he declined to name the potential buyers of the 25 per cent stake in its LNG project in
Canada.
"We have more or less concluded it with the Indian company. That's a done deal," he told reporters
on the sidelines of the Petronas' financial results announcement, here yesterday.
Last week, Shamsul Azhar was quoted in Singapore as saying that Petronas has agreed to sell a 25
per cent stake in its Canadian shale gas assets to an Indian company and an Asian gas buyer.
Petronas is looking to share some of the costs of bringing LNG from North America to energy-
hungry Asia.
Petronas acquired control of the project through its C$5.2 billion takeover of Canadas Progress
Energy Resources Corp in 2012, making it the second-biggest shareholder in British Columbias
Montney shale-gas area.
Citing it as a massive project, Shamsul Azhar said the company aims to reduce its share in Pacific
NorthWest LNG, which runs a gas export facility, to as low as 50 per cent by selling stakes to Asian
gas buyer so that it would be able to move forward.
"We have to move fast. So, that is why we want to reduce our stakes in the Canada's LNG project to
Asian gas buyers," he said.
Prior to this, Petronas has completed the sale of 10 per cent share in Canada LNG project to Japan
Petroleum Exploration Co Ltd on April 26 last year, and secured the first LNG buyer. A further sale of
three per cent to Petroleum Brunei was completed on December 18 last year.
"We have set aside another two per cent stake for Petroleum Brunei, and with this, we would have
reduced our stake in Canadian LNG to 40 per cent.
"The negotiation with other potential buyers is ongoing. We would make the final investment
decision (FID) on the project by the end of this year," he said, adding the company has awarded triple
front-end engineering design (FEED) and early detailed engineering for Pacific NorthWest LNG on
May 2 last year.
"When the FEED is completed, we will make the FID on the project," he said.



Apart from this, Progress Energy Resources has entered into a purchase and
sale agreement with Talisman Energy Canada and Talisman Energy Inc on
November 8 last year to acquire a 50 per cent interest in assets and facilities in
Talisman Sasol Montney Partnership as well as a 100 per cent interest in
Montney assets in the foothills of British Columbia for about C$1.5 billion.

A C$30 million deposit has been paid for the acquisition, which is subject to
relevant approvals. The transaction is expected to complete in the first quarter
of this year.

Asked whether the RM60 billion Refinery and Petrochemicals Integrated
Development (Rapid) project in Pengerang, Johor would be scaled down due to
delays, Shamsul Azhar said the project would continue and would not be
scaled down.
"We would make the FID on the project by the end of this month but most
important, we see that the project is economic and viable. We would not take
it (Rapid) to the board if it is not economical and viable. We have no choice but
to continue," he said.
He, however, did not deny that there would be delays in implementing the
project but said it depends on market condition.
"If the market is tight and says we should delay, then we will delay. But let's
wait for the FID first," he said.

Last week, Thailand's PTT Global Chemical pcl (PTTGC) said it has scrapped a
plan to invest in a downstream petrochemical project with Petronas after a
study showed chances of low returns.

PTTGC, which is 49 per cent owned by top energy firm PTT pcl, has signed an
agreement with Petronas for several petrochemical downstream projects
within the proposed Rapid complex.

Besides PTTGC, other international companies such as Italys Versalis SpA,
Japans Itochu have also signed agreements with Petronas to jointly own,
develop, construct and operate two separate complexes for the production of
high value-added downstream chemicals.

The Rapid project is amounted to US$20 billion and is expected to come on-
stream commercially in 2017.


Read more: Petronas to downsize stake in LNG project - Today's Paper - New Straits
Times http://www.nst.com.my/business/todayspaper/petronas-to-downsize-stake-in-lng-project-
1.498123#ixzz32A8X0G00