Malaysia's UBG in oil venture with Abu Dhabi fund

KUALA LUMPUR, Sept 25 (Reuters) - Malaysian infrastructure firm UBG Berhad (UBGB.KL) and Abu Dhabi investment agency Mubadala Development Co have agreed to form a 50:50 joint venture to develop petroleum projects in the Southeast Asian country, UBG said on Thursday.

UBG said the initial focus of the joint venture would be on exploring oil projects in the East Malaysian states of Sabah and Sarawak on Borneo as well as Terengganu on the east coast of peninsular Malaysia.

"It is the intention of Mubadala and UBG to procure the respective state governments to co-invest in the project company," it added.

Mubadala, an Abu Dhabi investment arm which manages over $10 billion in assets, said in May a consortium would develop a $600 million city in Nusajaya in the Iskandar region of Malaysia.

Mainly Muslim Malaysia has been experiencing an increase in fund flows from the Middle East.

Last September Malaysian infrastructure and energy group MMC Corp (MMCB.KL) sealed a maritime and property pact worth $4.7 billion with Dubai World, an investment unit of the Dubai government. The MMC-Dubai World project is also located in the Iskandar Region neighbouring Singapore. (Reporting by Soo Ai Peng; Editing by Greg Mahlich)