TotalEnergies Sells its Subsidiary in Brunei to a Malaysian Firm

TotalEnergies has agreed to sell its wholly-owned subsidiary TotalEnergies EP (Brunei) B.V. to Hibiscus Petroleum Berhad, a Malaysian independent oil and gas exploration and production company, for USD 259 million. The transaction is expected to close in the fourth quarter of 2024.

TotalEnergies EP (Brunei) B.V. owns and operates a 37.5% interest in Block B alongside Shell Deepwater Borneo (35%) and Brunei Energy Exploration (27.5%). Block B, an oil and gas project in Brunei, contains the Maharaja Lela/Jamalulam (MLJ) field, which started in 1999 and represented a net production for TotalEnergies of approximately 9,000 barrels of oil equivalent per day in 2023. Block B is situated 85 kilometers off the coast of Brunei.

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“This transaction fits with our strategy to actively manage our portfolio by monetizing mature assets and to allocate our talents to the most promising assets,” said Jean-Pierre Sbraire, Chief Financial Officer of TotalEnergies.

Maharaja Lela/Jamalulam field: An Overview

The Maharaja Lela/Jamalulam (MLJ) field is located in Block B, 85 kilometers off the coast of Brunei, and has been a cornerstone in the country's energy industry since its inception. The MLJ field began production in 1999 and has contributed to Brunei's economy.

In 2023, the field's net production for TotalEnergies, one of the stakeholders, was approximately 9,000 barrels of oil equivalent per day. The field's crucial role in ensuring Brunei's economic stability and energy security—a country heavily dependent on oil and gas revenues—underscores its significance.

The MLJ field's operation and ownership reflect the dynamic nature of the global oil and gas market, where strategic partnerships and asset management are key to sustaining production and profitability. The field's enduring production capacity demonstrates the successful application of technology and expertise in extracting value from mature oil and gas fields worldwide.

Reasons for the Divestment

Strategic Portfolio Management: The sale is part of TotalEnergies' strategy to actively manage its portfolio by divesting mature assets and reallocating resources to more promising areas. Through selling this subsidiary, TotalEnergies can focus on assets with higher growth potential and better align its portfolio with the company's long-term objectives.

Monetizing Mature Assets: The decision to sell the Brunei subsidiary reflects TotalEnergies' approach to monetizing mature assets. As fields like MLJ mature, their production levels may plateau or decline, leading to potentially higher operating costs and lower profitability. Selling such assets allows TotalEnergies to capture value from these investments and redeploy capital into areas with higher returns and longer-term growth prospects.

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