This article first appeared in The Edge Malaysia Weekly on October 27, 2025 - November 2, 2025

KUWAIT Foreign Exploration Co (KUFPEC), a subsidiary of Kuwait Petroleum Corp, may sell its 42.5% stake in Block SK-410B in the Central Luconia province, off Sarawak, sources familiar with the matter tell The Edge.

While details are scarce, the name that has cropped up as a buyer, according to industry sources, is France’s TotalEnergies.

Neither KUFPEC nor TotalEnergies responded to questions from The Edge on the potential sale and acquisition to either deny or confirm the speculation.

Nevertheless, two separate sources say they have heard negotiations are ongoing between the two companies on the potential sale.

“There have been talks [for TotalEnergies to buy KUFPEC’s stake in SK-410B] but nothing concrete has been reached thus far,” one source says, declining to elaborate as the talks are confidential.

Another source concurs, saying that KUFPEC’s partners in SK-410B are aware of the possible stake sale to TotalEnergies. The partners are PTTEP HK Offshore Ltd — a unit of PTT Exploration and Production PCL, the national petroleum exploration and production company of Thailand — with a 42.5% stake, and Petronas Carigali Sdn Bhd, the exploration arm of Malaysia’s national oil company Petroliam Nasional Bhd (Petronas), with 15%.

It is noteworthy that KUFPEC has other assets in Malaysia as well, such as a stake of 29.4% and 35% in offshore projects Block PM-304 and Block SK-304 respectively.

SK-410B, which includes the Lang Lebah well, is located about 90km off Sarawak. It was in the news in 2021 for being a large discovery with an estimated six trillion to seven trillion cubic feet of gas after an appraisal drilling campaign, and for the successful drilling of Lang Lebah-1RDR2, the first exploration well in 2019.

However, in February this year, PTTEP scrapped a number of contracts and tenders, including multiple engineering, procurement and construction tenders, and delayed the project’s final investment decision until 2026 as the project was re-engineered as a result of high costs.

There were also murmurs that the delay in the final investment decision was a result of a feud between Petronas and Sarawak’s state-owned Petros over a gas supply payment dispute, with both wanting to be the sole aggregator of the gas business in the state. This, however, remains conjecture at press time.

In May this year, Prime Minister Datuk Seri Anwar Ibrahim and Sarawak Premier Tan Sri Abang Johari Tun Openg signed a joint declaration ensuring Petronas’ role would remain intact while formally recognising Petros’ position in Sarawak.

Since then, there has been little news on the subject.

Oil prices have also been tapering off. Over the past year, Brent Crude has shed about 10.9% of its value and is trading at the US$66 per barrel level. This decline comes despite sharp gains last week. On Thursday, oil prices strengthened 5% to a two-week high, brought about by the US imposing sanctions on Russian oil companies Rosneft and Lukoil as a means of ending the war in Ukraine. In a nutshell, while sanctions on Russia will reduce the supply of available crude oil and drive prices higher, the Kremlin’s ability to fund its war effort and support its weakened economy are jeopardised by the sanctions.

Rystad Energy, in an update, says: “The latest sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, resulted in Brent surging 6% in one day (last Thursday) as traders and refiners scrambled for alternative supplies. Overall, we estimate that between 500,000 and 600,000 barrels per day of Russian oil production is at risk of being curtailed.”

TotalEnergies, meanwhile, has been aggressively buying assets in Malaysia.

In June this year, TotalEnergies expanded its upstream portfolio in Malaysia via the acquisition of a 50% stake in two offshore blocks from Petronas — SK301B and SK313, which contain gas discoveries amounting to more than four trillion cubic feet. It is noteworthy that Petronas will retain the remaining 50% interest via its exploration arm, Petronas Carigali, as a partner of TotalEnergies.

In December 2024, TotalEnergies acquired a 50% stake in SapuraOMV from Vantris Energy Bhd (KL:VANTNRG). SapuraOMV in turn has 40% equity interest in SK408 and 30% in SK310, both of which produce gas off Sarawak.

In 2023, TotalEnergies inked a deal with Petronas and Japan’s Mitsui to develop a carbon dioxide storage plant in Southeast Asia and was evaluating possible sites in Malaysia.

Other than the above, TotalEnergies and Petronas are looking at holding stakes in several exploration blocks off Malaysia and Indonesia as partners. 

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