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Petronas goal: increase foreign income

June 24, 1996

Malaysia's Petronas has taken a major step in a campaign to jack up its overseas income. The state owned company agreed to pay $436 million for a 30% controlling interest in South African group Engen, a refiner/marketer. It is the largest foreign investment in South Africa since the end of apartheid. Hassan Marican, Petronas president and chief executive officer, said his company's goal is to obtain 30% of its revenue by 2005 from overseas ventures with foreign partners. Marican

Malaysia's Petronas has taken a major step in a campaign to jack up its overseas income.

The state owned company agreed to pay $436 million for a 30% controlling interest in South African group Engen, a refiner/marketer. It is the largest foreign investment in South Africa since the end of apartheid.

Hassan Marican, Petronas president and chief executive officer, said his company's goal is to obtain 30% of its revenue by 2005 from overseas ventures with foreign partners.

Marican explained that the deal is not a takeover of Engen but "a partnership for growth."

He said, "The attactiveness is that South Africa is not a mature market. It is a growth market."

South Africa's products market is growing 5-8%/year.

Engen operates a 65,000 b/d refinery at Durban and holds a 25% share in the South African products market through a network of 1,350 service stations. It also exports 12,000 b/d of petroleum products to neighboring countries.

The two companies plan to cooperate in upstream operations.