Wednesday February 13, 2013
By INTAN FARHANA ZAINUL
PETALING JAYA: Oil major ExxonMobil said its upstream operations in Malaysia would remain an integral part of its global portfolio nothwithstanding the recent disposal of its downstream businesses in Malaysia.
ExxonMobil subsidiaries in Malaysia chairman J. Hunter Farris said its new production-sharing contract for a period of 25 years with Petroliam Nasional Bhd and Petronas Carigali Sdn Bhd, signed in 2008, evidenced this.
“This partnership marks the start of the next 25-year phase of our operations in Malaysia until 2033 and sees us working with our partners to help ensure the efficient development and sustainable supply of hydrocarbon resources to meet the growing energy demands of the nation,” he said in an interview with The Business Advocate, a Malaysia International Chamber of Commerce and Industry quarterly business publication.
The company produces a fifth of the nation’s crude oil and condensate and supplies about half of Peninsular Malaysia’s natural gas needs.
To recap, last year, in a deal valued at RM1.8bil, Petron acquire a stake in Esso Malaysia Bhd and bought the unlisted downstream business of ExxonMobil, which includes Exxon’s industrial and wholesale and aviation fuels operations and the Port Dickson refinery, along with equity interest in 10 fuel distribution terminals and 560 branded retail fuel sites.
Farris said in the case of the disposal of its retail operation to Petron,Exxon Mobil Corp, the parent company of Malaysian ExxonMobil subsidiaries, determined that an asset might hold more value for a new owner than the corporation, and that was the case with the share sale of its downstream businesses in Malaysia.
Other projects in the pipeline for the company this year include the Telok and Damar gas development projects, which ExxonMobil is developing for a scheduled start-up in the first and fourth quarter of 2013, respectively.
The company will invest about RM10bil for both projects to meet the growing gas demand for Malaysia’s power and industrial needs. These projects were announced under the Economic Transformation Programme (ETP) in 2011.
Meanwhile, based on ExxonMobil’s energy outlook, it projected the energy demand in Malaysia to be about 50% higher in 2040 compared with 2010, driven by economic growth and propelled by initiatives under the Government’s ETP.
Apart from upstream operations, ExxonMobil also has a Business Support Centre that hosts the company’s IT infrastructure and provides IT support across the globe.
In 2011, it took another step in promoting Malaysia as a key business support centre by establishing the ExxonMobil Research and Engineering Global Support Office in Kuala Lumpur, which provides technical, engineering and application support for ExxonMobil’s global downstream businesses.
“We also have a strong market presence in the chemical industry, supplying a wide range of specialty products such as fluids, plasticisers and specialty chemicals that are used to manufacture products such as paint, tires and various types of consumer packaged goods,” Farris said.