Uchenna Izundu
International Editor
LONDON, Dec.18 -- Marathon Oil Corp. plans to sell its Irish subsidiary to Star Energy Group, a wholly owned subsidiary of Petroliam Nasional Berhad (Petronas), for $180 million in an effort to streamline its global portfolio.
The companies signed an agreement Dec. 17 and expect to close the transaction once they acquire approval from the Irish authorities, expected early in first-quarter 2009. Star Energy will not acquire Marathon's 18.5% interest in the Corrib natural gas development. However it will add 36 MMcfd of net gas production from the Irish assets to its portfolio.
Marathon Oil Ireland Ltd.'s assets include a 100% operated interest in the Kinsale Head area comprising the Kinsale Head, South West Kinsale, and Ballycotton gas fields, as well as an 86.5% interest in Seven Heads gas field, which is producing and tied back to Kinsale, and a 100% interest in its 7 bcf gas store. Marathon's total net risked resource associated with these assets at yearend 2007 was 62 bcf, of which 46.2 bcf were net proved reserves. Marathon's Irish staff will be transferred to Star Energy.
Marathon said offloading global noncore assets would raise nearly $1.2 billion in cash pretax. "We anticipate that this program will generate $2-4 billion in cash pretax by midyear 2009," said David E. Roberts, Jr., Marathon executive vice-president of upstream.
Contact Uchenna Izundu at [email protected]