KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Malaysia’s national oil-and-gas company Petroliam Nasional Bhd (Petronas) announced its decision to withdraw operations from South Sudan, marking the end of a more than two-decade presence in the East African country.
Key Highlights:
- Divestment Decision: Petronas' decision follows a two-year period of divestment initiatives, aligning with its long-term investment strategy amidst a changing industry environment and accelerated energy transition.
- Scrapped Sale: A planned sale of Petronas’ entire oil and gas business in South Sudan to Savannah Energy PLC, a British energy company, for up to US$1.25 billion (RM5.6 billion) was cancelled after both parties failed to reach an agreement. Savannah remains in discussions with relevant parties for an alternative transaction.
Historical Context:
- Petronas’ venture in South Sudan faced numerous challenges, including the country’s secession from the Republic of Sudan in 2011 after decades of armed conflict, which resulted in the deaths of over two million people.
- An ongoing civil war between armed factions in South Sudan has caused over 14,000 fatalities, according to United Nations estimates.
Strategic Review:
- In 2011, Petronas opted not to participate in South Sudan’s first oil licensing round, citing challenging market conditions. The company is undertaking a strategic review to ensure its asset portfolio remains resilient and commercially viable.
- In December 2022, Petronas announced the sale of its entire portfolio in South Sudan to Savannah. The assets included interests in 64 producing fields, with production starting in 1999.
Potential Impact of the Scrapped Deal:
- Had the deal proceeded, Savannah would have acquired Petronas’ stakes in three joint operating companies managing Blocks 3 and 7 (40% working interest), Blocks 1, 2, and 4 (30% equity), and 33.9% in Block 5A.
Petronas’ exit from South Sudan signifies a significant shift in its strategic direction, influenced by the complex and volatile environment in the region and the broader energy transition.
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