Petronas, as the company is known, will take over 47 percent of the Chinguetti field, Mauritania's only oil-producing project, and stakes in areas including Tiof, Tevet and Banda. Woodside is considering options for its remaining African assets, it said in a statement to the Australian Stock Exchange today.
The Malaysian company has spent more than $1.4 billion acquiring assets in Europe and Australia since January following a second year of decline in domestic production. Woodside is selling its assets after output in Chinguetti fell short of estimates and the company resolved a dispute with the Mauritanian government over oil licenses.
``Petronas has been expanding their reach beyond Malaysian shores,'' said Patrick Chang, who helps manage $4.5 billion at CIMB-Principal Asset Management Bhd. in Kuala Lumpur. ``They have the cash and oil is a scarce commodity so if they buy it would be to build reserves for their future.''
Crude oil in New York surged to a record $83.90 a barrel on Sept. 20. Prices have risen 28 percent in the past year, to $81 a barrel at 12:18 p.m. Singapore time.
`Below Valuation'
Woodside, Australia's second-largest oil and gas producer, said on Aug. 22 it plans to exit its business in Africa, including the Chinguetti oil project.
``Woodside's sale of the Mauritanian assets for $418 million to Petronas is lower than our valuation of the Chinguetti and Tiof assets, and hence is expected to reduce our valuation of Woodside by about 1 percent,'' Anthony Bishop, an energy analyst at Goldman Sachs JBWere in Melbourne, said in a research note today.
He may cut his earnings forecast for Woodside between 8 percent and 10 percent for 2008 to 2010, said Bishop, who has a hold recommendation on Woodside shares.
Chinguetti has a peak daily production capacity of 75,000 barrels of oil, according to Woodside's Web site.
Woodside, which operates Chinguetti, slashed in November its estimate of reserves at the oil field by 57 percent to 53 million barrels.
African Assets
Woodside had a dispute with the Mauritanian authorities over the validity of its oil production contracts, which resulted in the company paying a $100 million ``project bonus'' to the government.
Since 2000, Woodside has expanded its operations in Africa to Kenya, Libya, Algeria, Canary Islands, Sierra Leone and Liberia, according to its Web site.
Petronas, founded in 1974 to develop Malaysia's oil and gas reserves, earned a record 46.4 billion ringgit ($14 billion) in the year ended March 31. It has operations in more than 33 countries including Myanmar, Vietnam, Pakistan and South Africa.
The Malaysian company's total domestic production fell 3.1 percent to the equivalent of 1.13 million barrels of oil a day in the year ended March 31. Domestic output dropped because of maintenance and repair work, as well as project delays, according to Petronas.
Overseas Operations
Overseas operations contributed 37 percent of Petronas's revenue, exports accounted for 40 percent and domestic operations made up the rest at 23 percent, the Malaysian company said in June. Output outside Malaysia rose 35 percent to the equivalent of 581,700 barrels of oil a day in the year ended March, Petronas said.
Petronas's oil and gas production in Chad, Egypt and Sudan was equal to 255,300 barrels of oil a day in the year ended March, accounting for 59 percent of total overseas output.
The company increased its stake in APA Group, an Australian owner of natural gas pipelines, to 16.7 percent last month from 13.53 percent. Last week, Petronas made its biggest European investment, agreeing to buy Italian lubricant maker FL Selenia SpA for 1 billion euros ($1.4 billion) including debt.
Petronas is expected to complete the acquisition in November and the final price will be adjusted then, Woodside said.
