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Kuala Lumpur-based oil and gas producer Hibiscus Petroleum Berhad has agreed to purchase a Brunei subsidiary of France's TotalEnergies for $259 million. The acquisition, facilitated by Malaysian law firm Murad Yee Partnership, represents a significant expansion for Hibiscus.

Hibiscus Buys TotalEnergies Unit For $259M : Details of the Acquisition

The subsidiary, TotalEnergies EP (Brunei) B.V., holds a 37.5% stake in Block B, a gas-producing field located off the coast of Brunei in Southeast Asia. This stake is co-owned with Shell Deepwater Borneo, holding 35%, and Brunei Energy Exploration, holding 27.5%, as per the announcement.

Strategic Expansion for Hibiscus

"We have been looking for the right opportunity to enter the Brunei energy industry for some time and we would like to thank TotalEnergies for trusting Hibiscus Petroleum to steward this asset going forward," said Kenneth Pereira, Hibiscus' managing director.

He added, "The additional volumes from this transaction are material for Hibiscus Petroleum and will provide an uplift of nearly 86% to our gas production."

Hibiscus Buys TotalEnergies Unit For $259M : Legal and Financial Aspects

Murad Yee Partnership advised Hibiscus on the deal, while counsel information for TotalEnergies was not immediately available. The transaction, expected to close between October and December, will require approval from Hibiscus' investors. TotalEnergies Brunei staff will also transition to Hibiscus under this deal.

Jean-Pierre Sbraire, TotalEnergies' chief financial officer, stated the transaction "fits with our strategy to actively manage our portfolio by monetizing mature assets and to allocate our talents to the most promising assets."

Funding and Financial Strategy

Hibiscus announced that the acquisition would be financed through internally generated funds and/or existing debt. The exact breakdown of the financing source "will depend on, amongst others, the group's cash reserves and future funding requirements."

"The group does not intend to propose any equity issuances as a source of funding as the group believes that other available sources of funding are sufficient to fund the purchase consideration," Hibiscus stated.

Alignment with Strategic Goals

The company, listed on the Malaysian stock exchange Bursa Malaysia, highlighted that the proposed takeover aligns with its strategy of acquiring operated producing assets in stable legal jurisdictions and enhancing its gas asset portfolio. Hibiscus noted that Brunei is a "politically stable country" and a key liquefied natural gas exporter in the region.

Hibiscus operates solely and in joint production sharing arrangements or concessions in countries such as Malaysia, Australia, and Britain, according to its website.

Hibiscus Buys TotalEnergies Unit For $259M :  TotalEnergies' Global Presence

TotalEnergies, an oil and gas giant also active in renewables and electricity, operates in about 120 countries with over 100,000 employees. Listed on exchanges in London, Paris, and New York, TotalEnergies recently agreed to acquire Sapura Upstream Assets Sdn Bhd's 50% interest in Malaysian gas producer and operator SapuraOMV Upstream Sdn for $530 million.

Shares in TotalEnergies remained steady at 62.35 pence at lunchtime Friday.