Malaysian state ready to buy out Petronas stake after Mahathir comment

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KUALA LUMPUR (Reuters) – The Malaysian state of Terengganu said on Wednesday it was open to buying a stake in national energy giant Petronas, after Prime Minister Mahathir Mohamad said he was considering such a sale to raise funds for his heavily indebted federal government.

FILE PHOTO: A Petronas logo at its offices in Kuala Lumpur, Malaysia, August 15, 2017. REUTERS / Lai Seng Sin / File Photo

Petronas, the world’s third-largest exporter of liquefied natural gas, is one of the federal government’s main sources of revenue, with debt of over 1,000 billion ringgits ($ 239 billion).

Mahathir told Reuters on Tuesday that the government may sell Petronas shares privately to states such as Sarawak, Sabah, Terengganu and Kelantan, where the company owns most of its energy assets.

Petronas, officially known as Petroliam Nasional Bhd, is wholly owned by the federal government and has many units.

“If it is equity, let’s say 5% or 10%, then we can probably consider (buying) a reasonable amount of equity,” said Ahmad Samsuri Mokhtar, chief minister of the eastern state. from Terengganu, to state journalists. capital, according to the national news agency Bernama.

There is, however, no formal proposal on the table yet, Ahmad Samsuri said.

JC Fong, legal adviser to the Sarawak government, told Reuters he would not comment on Mahathir’s statement on Petronas until he saw a proposal and had a chance to assess it.

Sarawak accounts for two-thirds of Malaysia’s total gas production and nearly a third of its oil, Fong said.

Sarawak and neighboring Sabah, both located on the island of Borneo and separated from Peninsular Malaysia by the South China Sea, have the country’s most prolific oil and gas reserves.

Both states have long called for a quadrupling of royalties paid by Petronas to 20% of its profits – a request Mahathir rejected, seeking instead other ways to satisfy the states.

($ 1 = 4.1700 ringgits)

Reporting by Krishna N. Das; Editing by Muralikumar Anantharaman

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