M&A in Southeast Asia - 2024 Q2

Q2 has been has seen four new deals announced in Southeast Asia, one each in Myanmar, Malaysia, Brunei and Vietnam. A transaction value was announced for two of the deals, with a total deal value of about US $965 million.

The running totals for 2024 (H1) are six deals, with a total deal value of US $1,870 million. As a comparison, H1 2023 saw 8 deals with a total value of about US $85 million.

New deals announced in Q2

The four new deals announced in Q2 were:

• The first deal came in early-April, with a formal announcement that Chevron had exited Myanmar where they held a 41.1% stake in the Yadana field (M-5/M-6). Chevron announced their intention to exit back at the start of 2022, with a deal announced in February 2023 for the sale of their stake to MTI Energy. However, this sale never completed and they have now handed back their stake to the remaining partners: PTTEP (now 62.963% + operator), and MOGE (now 37.034%). The Yadana project has been producing gas since August 1998. Teh development is based on a complex of offshore platforms with a gas export pipeline bringing the gas to shore, where it is split between the domestic market (Myanmar) and pipeline exports to Thailand.
• The next deal was announced in late-April, and saw TotalEnergies announce an agreement for them to acquire Sapura Energy's 50% interest in SapuraOMV. This follow's their deal announced in January to acquire OMV's 50% stake in SapuraOMV. The transaction is for a cash consideration of US $530.3 million, in addition Sapura Energy will be relieved by TotalEnergies of a US $175 million obligation in respect of a financing facility extended by OMV to SapuraOMV. The deal is expected to close by the end 2024. I looked at the details of this deal when the OMV deal was announced: https://www.dhirubhai.net/pulse/malaysia-ma-totalenergies-acquire-omvs-50-interest-robert-chambers-juhgf/.
• The next deal came in mid-June and saw Hibiscus Petroleum and TotalEnergies announce an agreement for the former to acquire the latter's 37.5% operated stake in Block B in Brunei. The deal is for a consideration of US $259.4 million, with an effective date of 31 December 2022. It is expected to close in Q4 2024 and, once complete, the rights holdings of Block B will be Hibiscus Petroleum (37.5% + Operator), Shell (35%) and Brunei Energy Exploration (27.5%). This marks a country exit from Brunei for TotalEnergies and is Hibiscus Petroleum's first move into the country, further expanding their regional footprint. Block B produces gas and condensate from the Maharaja Lela Jamalulalam (MLJ) and Maharaja Lela South (MLS) fields through three wellhead platforms. The production is brought to shore through a pipeline where it is processed at an onshore processing plant, with the gas is sold to the Brunei LNG plant and the condensate sent to Seria Crude Oil Terminal (SCOT).
• The final deal came in late-June, with an announcement from Vietnam that Zarubezhneft have finally been granted approval to acquire KNOC's (KNOC manage the stake on behalf of a number of Korean companies) 75% operated stake in Block 11-2. The news coincided with a visit by President Vladimir Putin to Hanoi, with the announcement stating that Zarubezhneft had been granted the approval and “investment licence” for the block during a visit. Rumours of this deal have been running since 2019 so it has been a long time coming. I have not seen any deal value or confirmation that this announcement also signifies completion. Block 11-2 is located about 300 km southeast of Vung Tau, and produces gas and condensate from the Rong Doi and Rong Doi Tay fields. PVEP are the partner in the block, holding the remaining 25%.

In addition, we saw a formal agreement signed by Criterium Energy for the divestment of their 45% stake in the Bulu PSC in Indonesia that contains the Lengo field. This follows a letter of intent (LOI) being announced in December 2023. The total deal value remains at US $7.75 million but there has been a small shift in the payment schedule from the LOI. The buyer has still not been announced and the deal is contingent on the buyer securing financing. It should be noted that I have not included this deal in this quarter, with the deal value still allocated to 2023 Q4.

New awards

We also saw some new awards in the quarter related to blocks offered in recent bid rounds in both Indonesia and Malaysia.

• In mid-May, we saw the formal signing of the Bobara PSC in Indonesia to PETRONAS Carigali (100%). The award had been announced in February 2024, with the block offered in September 2023 as a part of the third bid round of 2023.
• In mid-June, the Banang field (Peninsular Malaysia) was awarded to Petra Energy (100%) under a new Late Life Asset (LLA) contract. Petra Energy had been operating the field on behalf of PETRONAS since June 2020 under a Technical Services Agreement (TSA).
• In late-June, the NBE Cluster (offshore Sabah) was awarded to Vestigo Petroleum (100%). The cluster consists of the Nosong, Bongawan North and Epidot (predominantly gas) fields. The cluster was reportedly offered as a part of the MBR+ bid round that was launched in October 2023, although no DROs in Sabah were mentioned at the time of launch. The award is under the Small Field Asset (SFA) terms.

In addition, Longboat Energy announced that they have been provisionally awarded a DRO in Malaysia, subject to successful negotiation of certain contractual terms. They have stated it is a shallow water DRO in Sarawak that was offered in the MBR+ bid round. From my data, this would mean it is either the DEWA Complex or the Ketapu Cluster. They have stated their bid is partnered with an incumbent international E&P company, so we will have to wait for the full details.

Deals that closed in Q2

From what I can see, the only deal that completed in the quarter was the Chevron exit of Myanmar.

Previously announced deals - Yet-to-complete

Given the lack of closed deals in the quarter, we see the list of announced, but yet-to-complete, deals continue to grow, with first dating from December 2022:

• From December 2022, we still have BitExco's acquisition of MedcoEnergi's stake in Block 12W in Vietnam. I hear that MedcoEnergi are being cautious to ensure full compliance but expect the deal to close.
• The next deal came in mid-August 2023, with Harbour Energy announcing that they have signed an SPA with Big Energy for the latter to acquire Harbour's stake in Block 12W in Vietnam. It seems like things are going slowly in Vietnam but I believe that completion of both the Block 12W deals will happen.
• The next deal came in early September 2023 and saw PTTEP acquire TotalEnergies last remaining upstream interest in Thailand through the acquisition of TotalEnergies 33.33% stake in block G12/48 (Bongkot South). At the time, they said completion was expected by the end of 2023. However, in their 26th June 2024 investor presentation they stated the completion of the SPA was still in progress.
• The next deal came mid-November 2023 and involved a formal farm-in agreement being signed between Sacgasco and Philippines National Oil Company PNOC for the latter to farm-into Service contract 6B that contains the Cadlao field. This could be complete, but I believe it still requires DOE approval.
• There is also a related sale of Sacgasco subsidiary Nido Petroleum to Blue Sky. Again, this could be complete, but the last news I have seen was that Blue Sky have failed to pay the second (and final) installment of US $900,000 that was due by the end of April.
• The next deal is the previously mentioned sale by Criterium Energy of their 45% stake in the Bulu PSC in Indonesia. We saw the formal deal announced this quarter but the mystery buyer still needs to secure financing.
• The final deal came in at the end of January, with TotalEnergies announcing that they had agreed to acquire OMV's 50% interest in SapuraOMV. When the deal was announced, it was stated that it was expected to close during the first half of 2024. This may be delayed due to TotalEnergies also acquiring the Sapura Energy stake in SapuraOMV in April.

Assets on the market

I have been keeping track of the assets on the market, with these summarised in the table below:

The main changes from Q1 are:

• I have removed Sapura Energy's 50% stake in SapuraOMV following the deal announced for TotalEnergies to acquire this stake.
• I have removed TotalEnergies' stake in Block B in Brunei following the deal announced for Hibiscus Petroleum to acquire this stake.
• I have added Northern Gulf Petroleum's stake in Block G06/48 that contains the Rossukon field as I understand they may be looking to divest the asset.

More details of the landscape in Southeast Asia can be a found in my individual country analyses.

Questions and feedback

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