UBG, Mubadala in oil & gas venture

UBG, Mubadala in oil & gas venture
BTimes
Published: 2008/09/25

The equal joint venture will initially focus on Terengganu, Sabah and Sarawak, and sources say the partners will bid for exploration blocks from Petronas

CONSTRUCTION group UBG Bhd plans to partner Mubadala Development Co, the investment arm of Abu Dhabi, to set up an oil and gas exploration and production company in Malaysia.The equal joint venture will initially focus on Terengganu, Sabah and Sarawak, UBG said in a statement to Bursa Malaysia yesterday."It is the intention of Mubadala and UBG to procure the respective state governments to co-invest in the project company," it added.Both firms signed a heads of agreement for the proposed joint venture agreement in Kuala Lumpur yesterday.

The partnership will explore, develop, operate, produce, treat and sell petroleum within Malaysia.Sources said the tie-up will bid for exploration blocks from Petroliam Nasional Bhd, the state oil and gas company."UBG is Mubadala's exclusive partner in Malaysia for oil and gas," one of the sources said. This means that the joint venture will be the main vehicle for all future oil and gas investments by Mubadala in Malaysia.This could be the second major investment by Mubadala, which manages over US$10 billion (RM34.3 billion) of assets worldwide, in Malaysia.

Mubadala, Kuwait Finance House and Millennium Development International Co committed US$1.2 billion (RM4.1 billion) to buy 892ha of land in Iskandar Malaysia, Johor, last year."The increasing involvement of Mubadala in Malaysia may represent the entry of a long-term player that finds the Malaysian economic landscape in real estate and oil and gas attractive," the source added.The initial deal also reflects the ability of UBG's major shareholder, Abu Dhabi-Kuwait-Malaysia Investment Corp, to help pull in the Middle Eastern capital into Malaysia.Under the new shareholder, UBG has plans to turn itself into a construction and energy powerhouse. It recently completed buying builder Putrajaya Perdana Bhd and water infrastructure firm Loh & Loh Corp Bhd.