MISC Buys Back 50% Equity in Gumusut-Kakap for $445mln

Maritime Activity Reports, Inc.

February 25, 2016

Gumusut-Kakap field. Photo: Shell

Gumusut-Kakap field. Photo: Shell

 Malaysian state-owned shipping company MISC has bought the remaining 50% stake in the Gumusut-Kakap Semi-Floating Production System Limited (GKL) for $445m from E&P Venture Solutions (EPV), part of Petronas Carigali. 

 
GKL, a wholly-owned subsidary of PETRONAS Carigali Sdn Bhd (PCSB), owns the Gumusut-Kakap semisubmersible floating production system (FPS), which is now on a 25 year charter with Sabah Shell Petroleum Co. - a unit of Royal Dutch Shell plc. - that commences October 2014. 
 
MISC told Bursa Malaysia on Wednesday that it had sold the stake in GKL, which left it with the remaining 50%, to strengthen the group’s financial position, which has since improved significantly. 
 
The monetisation of GKL enabled the MISC group to pare down its debt and improve its liquidity and cash position, it explained.
 
The offshore production facility is in operations at the deepwater Gumusut-Kakap field offshore Sabah, Malaysia and can produce 150,000 barrels of crude oil per day from subsea wells, while equipped for 300 million cubic feet per day gas injection and 225,000 barrels of water per day water injection. 
 
"Upon completion of the SPA, GKL will become a wholly-owned subsidiary of MISC," the company said in the announcement. 
 
PCSB is an upstream arm of Malaysia's national oil company Petroliam Nasional Berhad (PETRONAS), which holds 62.67 percent equity interest in MISC.  
 
According to a Shell website, the Gumusut-Kakap field comprises 19 subsea wells, with oil exported via a 200km long pipeline to an oil and gas terminal in Kimanis, Sabah.
 
MISC’s gearing is expected to increase from 0.18 times to 0.3 times with the deal. The oil and gas (O&G) industry is currently facing a challenging environment.
 
The lingering weakness in the global crude oil prices has led to the slowdown in upstream activities due to the cutback in operating expenditures as well as capital investments by O&G companies. 
 
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