Bursa Malaysia-listed oil and gas firm Hibiscus Petroleum has signed agreements with global oil trader Trafigura for crude offtake and for future financing.
The agreements include potential future offtake of crude oil by Trafigura from assets owned/projects undertaken by Hibiscus. Further, the agreement also covers potential funding for projects and asset acquisitions pursued by Hibiscus."
Also, Hibiscus said that, working with Trafigura, it has also taken the opportunity to lock-in the sales price for a substantial portion of its North Sabah production over the CY2020 period. In a separate statement, Hibiscus explained that the "locked-in" North Sabah sale was for 750,000 bbls at an average price of USD 35/bbl.
Commenting on the agreement, Managing Director, Dr Kenneth Pereira, said, “We are pleased to be able to execute such a commercial agreement with a global institution such as Trafigura. This will allow the Group to leverage its existing and future production capacity with Trafigura’s global purchasing, funding and marketing capability.”
“Trafigura’s business in Asia has grown materially in the last few years,” said Chin Hwee Tan, CEO Asia Pacific for Trafigura. “One of the key objectives is for us to continue to think locally while leveraging off our global platform. In parallel, we are continuing to expand our support to a selected number of companies in the oil and gas upstream sector, in Asia and across the world.
"Local players such as Hibiscus Petroleum, together with the local financial system, are most important as our long-term partners as we continue to build our business in the region. We are looking forward to working with Hibiscus Petroleum as it continues to grow its asset base.”
Hibiscus is working Unit Production Costs (UPC) for 2020 at North Sabah, offshore Malaysia, through deferral of non-critical Opex activities and managing G&A. The company is targeting USD 15/bbl UPC for 2020 in North Sabah.