UPDATE 1-ConocoPhillips seeks to expand in Malaysia upstream

Tue Jun 8, 2010 7:03am EDT

Related Topics

*Conoco talking to Petronas to grow in Malaysian upstream

*Hard to say if firms would shift to Asia post-Gulf spill

*Gulf of Mexico to stay key supply point for U.S., the world (Adds details, background

By Seng Li Peng

KUALA LUMPUR, June 8 (Reuters) - ConocoPhillips (COP.N), the third-largest U.S. oil company by market value, is talking to national energy giant Petronas to expand its position in the upstream sector in Malaysia, a senior executive said on Tuesday.

"We are certainly looking for opportunities in Malaysia. We are talking to Petronas," said Ryan M Lance, ConocoPhillips' Senior Vice President, Exploration & Production, International.

"We would love to expand our position in Malaysia," he told Reuters on the sidelines of an oil and gas conference in the Malaysian capital.

Asked what areas ConocoPhillips is targeting, he said: "Exploration oil and gas. We are always looking for good opportunities."

ConocoPhillips has interests in three deepwater blocks off the eastern Malaysian state of Sabah: Block G, Block J and Kebabangan Cluster, it said on its website. It also has a stake in a refinery in Malacca with joint-venture partner Petronas [PETR.UL].

When asked if oil companies would shift their exploration work to Asia following the BP (BP.L) oil spill in the Gulf of Mexico, Lance said:

"It is tough to speculate right now. We just have to wait and see what went wrong and understand what the implications are.

"The Gulf of Mexico will remain an important supply point for the U.S. and the world."

ConocoPhillips does not have extensive offshore exploration and production operations on the U.S. Gulf Coast. But it has an 18 percent interest in the BP-operated Tiber prospect in the Gulf, in which Brazil's Petrobras PETR4.BR has a 20 percent interest.

Lance earlier told reporters expansion plans on the Melaka II refinery, in which ConocoPhillips has a 47 percent stake while Petronas holds 51 percent, have already been executed. But he did not specify what units were upgraded.

Industry sources had said that the joint venture partners had planned to build a 30,000-40,000 bpd hydrocracker for Melaka II, but it might have been put on hold.

The 140,000-bpd refinery also had plans to refurbish one of two crude units to handle high-acidic crude as well as adding adding 70,000 bpd of distillation capacity, sources had said, though the progress of these projects were unclear.

When asked why ConocoPhillips pulled out of the Abu Dhabi gas project in late April, he said:

"We have restrained capital. We have to look at total costs. But Abu Dhabi is a good place to do business."

Abu Dhabi National Oil Co (ADNOC) had said it will proceed with development of the Shah gas field despite ConocoPhillips' exit from the project. [ID:nLDE63S1MH] (Writing by Ramthan Hussain; Editing by Clarence Fernandez)

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