Petronas Stands by Brent Even After Manipulation Claim

Petroliam Nasional Bhd., Malaysia’s state energy company, remains committed to using Brent as a benchmark for buying and selling oil even amid accusations of price fixing, its chief executive said.

“I don’t see any manipulation,” Chief Executive Officer Shamsul Azhar Abbas told reporters in Kuala Lumpur today. “Brent is still the most acceptable benchmark.”

Four energy traders claimed in a lawsuit last month that some of the world’s biggest oil companies including BP Plc, Statoil ASA and Royal Dutch Shell Plc conspired with Morgan Stanley and energy traders such as Vitol Group to fix spot prices for Brent for more than a decade. The North Sea oil price as assessed by Platts, a unit of New York-based McGraw Hill Financial Inc., is used to price more than half the world’s crude including Australia’s Cossack, Malaysia’s Tapis and Castilla in Colombia.

The case is one of at least seven U.S. lawsuits alleging price fixing in the London-based Brent market. European Union antitrust authorities raided the offices of companies including Platts, BP and Shell in May amid allegations of collusion in setting prices of crude, refined products and biofuels.

The probe comes as global regulators scrutinize financial measures around the world after fining banks about $2.5 billion for distorting other benchmarks.

Petronas, as Malaysia’s state energy company is known, reported a 16 percent increase in third-quarter profit on increased sales. Net income rose to 14.5 billion ringgit ($4.5 billion) in the three months through September from a restated 12.5 billion ringgit a year earlier, according to a statement released today in Kuala Lumpur.

South Sudan

Revenue climbed 19 percent to 81.4 billion ringgit, buoyed by a resumption in South Sudan production and higher output in Malaysia and Canada.

Brent climbed to an average $110.36 a barrel during the three-month period from $109.61 a year earlier, Petronas said in the statement. Total production rose to 2.064 million barrels a day of oil equivalent in the third quarter from 1.904 million last year, according to the company.

Petronas is likely to book a full-year profit before tax for 2013 more than 90 billion ringgit on higher production and foreign exchange gains, Shamsul said. This is based on crude at between $106 to $108 a barrel and the ringgit at 3.12 to 3.15 to the dollar, he said.

The Malaysian producer has yet to complete a deal agreed in May to buy a 40 percent stake in two blocks of OGX Petroleo e Gas Participacoes SA (OGXP3)’s Tubarao Martelo field off Brazil for $850 million. OGX, which once transformed Eike Batista into Brazil’s richest man, filed for bankruptcy protection last month.

Stake Sale

A decision on whether to proceed will depend on the court ruling, Shamsul said, declining to elaborate.

In Canada, Petronas may sell another stake in its Pacific NorthWest LNG project, this time to an Indian company, Shamsul said, declining to name the buyer. It sold a 10 percent stake to Japan Petroleum Exploration Co. in March.

Petronas’s board has approved the sale which is pending approval from the Indian government, Shamsul said. “We hope to wrap up the deal as soon as possible.”

Petronas agreed last week to buy 75 percent of Talisman Energy Inc.’s Montney shale holdings in the Farrell Creek and Cypress areas of Canada’s British Columbia for C$1.5 billion. It’s making the acquisition through Progress Energy Canada, the company it bought last year for C$5.2 billion after an initial rejection from the Canadian government.

To contact the reporter on this story: Elffie Chew in Kuala Lumpur at echew16@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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