* KUFPEC, Premier Oil, Pertamina, Talisman considering bids
for the assets
* Hess under pressure from activist investor Elliot to
* Newfield selling interest in Malaysian and Chinese assets
* Moody's expects shareholder activism to continue
By Denny Thomas
HONG KONG, June 21 U.S. energy companies Hess
Corp and Newfield Exploration Co have launched
two separate auctions to sell part of their Asian oil and gas
field stakes that have a combined value of about $3 billion,
people familiar with the matter said.
Hess and Newfield, like a number of U.S. energy companies,
have been unloading ageing and less productive oil and gas
fields and investing back into more strategic and profitable
projects, particularly in and close to their home markets,
driven in part by activist shareholders.
Their retreat has been met by interest from Asian state oil
companies and others keen to boost their portfolios in the
Hess, under the gun from hedge fund Elliot Management since
January for changes to its governance and long-term strategy,
has announced plans to become a pure-play exploration and
It has sold or exited a number of businesses, announced
plans to quit its retail gasoline, marketing and trading
operations, and stripped CEO John Hess of his role as chairman.
Moody's Investors Service expects the number of activist
shareholder campaigns in the United States and Canada this year
to exceed last year's record levels.
"We don't expect shareholder activism to quiet down anytime
soon," Moody's Vice President Christian Plath said in a report
released on Thursday.
The campaigns have been fed by record levels of cash on
corporate balance sheets, a ready supply of inexpensive debt and
activists' own success in attracting investment capital.
Woodlands, Texas-based Newfield was also prodded to sell its
interest in China and Malaysian fields after suffering a
fourth-quarter loss in February.
KUFPEC, a unit of Kuwait Petroleum Corp, London-listed
Premier Oil, Indonesian state oil company Pertamina
Persero PT, and Thailand's state energy company PTT Exploration
and Production are among companies considering making
bids for the assets, the people familiar with the matter said.
Unlisted KrisEnergy, owned by private equity firm First
Reserve, and Canada's Talisman Energy Inc are also
expected to place bids, they added.
Preliminary offers for Newfield's assets are due by the end
of June, while Hess has set a mid-July deadline for its auction,
one person familiar with the matter told Reuters.
Goldman Sachs, which is handling both of the sales,
has sent out information packages to potential suitors, the
Newfield and Hess are among U.S. energy companies scaling
back their global ambitions to focus on more profitable
opportunities in their home market. They are also rebalancing
their energy portfolios by focusing on their most productive
assets and shedding others.
In Asia, Hess is selling its interests in Indonesia and
Thailand, with an estimated value of up to $2 billion, to focus
on the North Malay basin, the people said.
Hess, which has a market value of $22 billion, is the
operator of Thailand's Phu Horm onshore field with a 35 percent
stake. In Indonesia, Hess has a controlling stake in the Pangkah
gas producing asset, with KUFPEC as its partner with a 25
Newfield, which has a market value of $3.2 billion, is
selling its interest in Chinese and Malaysian fields with an
estimated value of about $1 billion, based on its production and
reserve data, the people said.
Petroliam Nasional Bhd (Petronas), Malaysia's
state oil firm, will be the key to that sale, since it is the
operator of some of the blocks in the Malay Basin in which
Newfield holds an interest.
"You need to have Petronas as a partner supporting you. That
limits the buyer universe," another person familiar with the
Newfield did not comment directly on the launch of the
auction but referred to a statement issued in April that said a
data room providing information about its international
businesses was expected to open in the second quarter.
KrisEnergy, Talisman, Premier and PTT Exploration declined
"Pertamina is always keen to expand its upstream business
and explore every opportunity available. Naturally domestic
(Indonesia) assets are prioritised," Pertamina Corporate
Communications chief Ali Mundakir told Reuters via a text
message. He declined to comment further.
Hess did not offer an immediate comment. Kuwait Petroleum
was not available for comment.