Petronas in no rush to pull the plug with Gazprom

Malaysia’s national oil and gas company Petronas will not rush into making a speedy decision on the future of its business operations with Gazprom despite Russia last week invading neighbour Ukraine; a bloody incursion that has already led to the stated departure of industry heavyweights such as BP, Shell and Equinor.

“We have operations in Iraq, where we have collaboration with Gazprom. Insofar as any position to be taken, we are taking guidance on the kind of sanctions that are going to apply,” Petronas chief executive Tengku Muhammad Taufik said on Tuesday, at the company’s 2021 results briefing.

“We are not going to be rushing into any decisions yet. We’ve taken into account the position and the geopolitics at the country level; that is something we will stand guided [by] if the policy-makers take a stance.”

Petronas has a non-operated stake in Gazprom Neft’s giant producing Badra oilfield onshore Iraq, which has estimated in-place reserves in the 3 billion barrels ballpark.

A full production complex, including an integrated oil and gas processing facility, with capacity to handle 5.4 million tonnes of oil and 1.6 billion cubic metres of gas per year, and sulphur granulation and production units, has been commissioned at the Badra field, according to Gazprom Neft.

Petronas until late last year was also in a joint venture partnership with Russia’s Lukoil.

The Malaysian company in December 2021 exited the Shah Deniz producing gas condensate project in Azerbaijan, divesting for some $2.2 billion its 15.5% stake - with the interest being shared pro rata among other partners including Lukoil and BP.

This deal superseded an earlier agreement between Petronas and Lukoil for the Russian player to acquire all of Petronas’ Shah Deniz equity because other co-venturers exercised their pre-emption options.

“While the situation there [Russia] is unfortunate, I can only say that as a responsible, reliable and committed energy producer, we will still serve our consumers everywhere and our partners everywhere throughout this period where prices are going to be volatile,” added Tengku Muhammad Taufik.