RM9bil Azerbaijan sale part of efforts to revalue Petronas' assets and businesses, says Tok Pa

Datuk Seri Mustapa Mohamed. - Bernama

KUALA LUMPUR: The recent sale of gas assets in Azerbaijan amounting to over RM9bil is part of the government's ongoing efforts to revalue the assets and business portfolios of Petronas, says Minister in the Prime Minister's Department (Economy) Datuk Seri Mustapa Mohamed.

"These decisions were made based on long-term commercial assessment... they are needed to maintain a strong fiscal position," he said in his speech at the Special Chambers in Parliament on Wednesday (Oct 27).

Mustapa revealed that the gas assets in Azerbaijan were not the only asset being revalued by the government.

"Other assets that have fulfilled their potential will be given consideration," he added.

Mustapa was speaking in the Special Chambers after Opposition leader Datuk Seri Anwar Ibrahim raised the motion to debate the asset sale in the Dewan Rakyat earlier in the day as it was a matter of public interest.

Mustapa said the Azerbaijan asset had been identified as a potential asset to be sold, or a "candidate of exit", since 2019.

However, Mustapa said last year had proven to be challenging due to the Covid-19 pandemic and selling the asset then would not have realised its full value.

He also said its sale was in line with Petronas' strategies in maximising cash generation, expanding core businesses and venturing into new areas.

Before Mustapa spoke, Anwar had said the sale of the Azerbaijan asset allegedly happened because Petronas was pressured to meet the government's dividend demand.

Mustapa denied Anwar's claim, saying that the sale of the asset was not carried out for that purpose.

"The approval (for the sale) was made on Oct 1 this year after approval from Petronas subsidiary Petronas International Corporation Ltd's board.

"Therefore, the sale is neither directly nor indirectly linked with the need to pay dividends to the Federal Government," he said.

Mustapa also said that in reality, Petronas has been able to pay its dividends including RM25bil to the government this year.

"Petronas has proven its ability to generate strong cash flow. Petronas will continue playing an important role in clean energy solutions in future, in line with the aspirations of Net Zero Carbon Emission 2050," he added.

On Oct 9, Petronas sold its 15.5% stake in the Shah Deniz natural gas project in the Azerbaijan sector of the Caspian Sea to Russian multinational energy corporation PJSC Lukoil Oil for RM9.41bil (US$2.25bil).

A statement by PJSC Lukoil Oil on Oct 8 said the completion of the sale was subject to fulfilment of certain conditions, including approval by Socar, the State Oil Company of the Azerbaijan Republic.

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