Petronas in talks to sell stake in Canada shale to Indian Oil: sources

Tue Jul 9, 2013 9:54am EDT
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By Niluksi Koswanage and Nidhi Verma

KUALA LUMPUR/NEW DELHI (Reuters) - Malaysia's Petronas PETR.UL is in talks to sell 10 percent of its Canadian shale gas assets to Indian Oil Corp (IOC.NS: Quote), sources with direct knowledge of the matter said, mirroring a deal it signed earlier this year with a Japanese company.

State-run Petronas last year bought Canada's Progress Energy Resources Corp in a C$5.2 billion ($4.92 billion) deal that gave it shale gas properties in northeastern British Columbia.

In March it sold a 10 percent stake in the integrated shale gas development and liquefied natural gas project to Japan Petroleum Exploration (Japex) (1662.T: Quote). Financial details of that deal have yet to be revealed publicly.

Terms of a potential deal between Petronas and state-run Indian Oil have not yet been worked out, the sources said.

Indian Oil did not have immediate comment and officials at Petronas could not immediately be reached for comment.

"Petronas has not opened this to anyone else, it prefers to directly approach one company at a time," said a source with direct knowledge of Petronas' commercial strategy.

The source ruled out the sale of a stake to Chinese companies if a deal with India does not materialize.

China's CNOOC Ltd (0883.HK: Quote) completed a contentious takeover of Canada's Nexen Inc in February. Ottawa approved that deal only after making clear it would not allow foreign state-owned firms to build up dominant positions in the Alberta tar sands.   Continued...