IOC eyeing Petronas' stake in Canadian asset

Petronas has approached IOC with an offer to sell a 10% stake in shale gas assets in northeastern British Columbia

State-owned Indian Oil Corp (IOC) is in talks to buy Malayasian oil firm Petronas’ 10 per cent stake in Canadian shale gas assets, which are touted to be worth of about $1.5 billion, sources with direct knowledge of the development said. IOC is in “very preliminary” talks, they said, adding the outcome of the negotiations would be known only after some months.

Petronas, they said, has put at least $1.5 billion as the value for its 10 per cent stake. The final sale price is likely to be substantially different.

The Malaysian firm, through its wholly-owned subsidiary Petronas International Corp, had in 2011 bought Canada's Progress Energy Resources Corp in a Canadian dollar 5.2 billion deal to get the Altares, Lily and Kahta shale gas assets in northeastern British Columbia.

It had in March sold a 10 per cent stake in this shale gas project and an accompanying project to turn the gas into liquid (LNG) to Japan Petroleum Exploration for an undisclosed amount.

Sources said the details of deal between IOC and Petronas have not been worked out as the talks are at preliminary stage. IOC which had previously ventured into overseas oil and gas exploration and production with state-owned explorer Oil India Ltd, is currently talking to Petronas alone. There has been no decision so far on talking OIL on board for the acquisition.

Shares of IOC today closed at Rs 219.30, up 0.97 per cent, on the BSE.