Marathon sells gas fields to Malaysia

THE Marathon Oil Corporation has sold off the bulk of its Irish operations — which include gas fields off the Cork coast that supply 8% of Ireland’s natural gas needs — to the Malaysian government for $180 million (€130.26m).

The sell-off does not include Marathon’s 18.5% interest in the controversial Corrib gas development. Marathon, the fourth- largest US oil company, yesterday announced it has agreed to sell Marathon Oil Ireland Ltd for $180m to Star Energy Group, a subsidiary of Petroliam Nasional Berhad, Malaysia’s state oil company.

The Irish unit’s assets include a 100% interest in the Kinsale Head gas fields, and an 86.5% interest in the gas-producing Seven Heads field. There’s also a 100% interest in a gas storage business with current capacity of 7 billion cubic feet.

The net production from the operations is about 36 million cubic feet of gas a day, Marathon said. The company said its net proved reserves related to the assets totalled 46.2 billion cubic feet at the end of 2007.

Star Energy will keep 61 Marathon workers in Ireland.

Bord Gáis Éireann, the State-owned gas company made a serious play to buy Marathon’s assets but failed.

Marathon also owns the pipeline which connects the Kinsale gas field to Bord Gáis Éireann’s national gas distribution grid.

Marathon said the Irish sale means its portfolio review and asset sales have produced about $1.2bn (€0.83m)in pretax cash as it seeks to generate up to $4bn by the middle of 2009.

“It’s part of Marathon’s reorganisation process to get them to the big question of whether to split up the company,” said James Halloran, who manages a $26bn fund in Cleveland.