Petronas buys Canadian shale gas assets worth RM3.32bil

PETALING JAYA: Petroliam Nasional Bhd (Petronas), via its wholly-owned subsidiary Petronas International Corp Ltd (PICL), has signed an agreement with Canada-based Progress Energy Resources Corp to acquire 50% of the latter's interest in shale gas assets worth C$1.07bil (RM3.32bil).In a statement yesterday, Petronas said the agreement was signed to develop the Altares, Lily and Kahta shale gas assets in north-eastern British Columbia.

Read more Petronas buys Canadian shale gas assets worth RM3.32bil

Shale based oil and gas production is an area that Petronas would want to venture into for a long time, since I was with the company back in 2007. One may would wonder why Progress has been tasked as the operator of the venture and not Petronas ? My logical explanation is that lacking of knowledge and capabilities to execute of similar nature projects [ producing oil in the most environmental friendly manner and lowest unit production cost ] and technology are the three(3) main reasons for such decision. This venture will address that gaps through technology and knowledge transfer to Petronas and more so to its staff. It is one way of capability building strategy that Petronas have been doing all the years. I foresee, if this venture is proven as successful and profitable, and they have the knowledge and technology, definitely more acquisitions are in the pipeline targeting countries like Morocco, USA , Eastern Europes and China. Petronas do have the financial muscle to be able to do so.

The next BIG questions are;

The supporting oil and gas companies in Malaysia like Sapura, Scomi, MISC, MMC, Kencana and Dialog to build the same capabilities- knowledge, technology and manpower. Are they ready to take up the challenges and opportunities that Petronas have opened up for them or their happy with the status quo ?

How about the other support industries like airlines industry ? How Malaysia Airlines and Air Asia for that matter respond this move by Petronas? Do they view as cold heart and one eye ?

How about the universities in Malaysia respond to this in producing stream of graduates who are marketable and ready for the jobs ?

Petronas' move is align with the government's target of RM 800 billion oil 'field' as reported recently in New Straits Times newspaper.

All the best !

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