The national oil firm confirmed the sale to MidOcean Energy, backed by EIG and Saudi Aramco, after months of speculation that it might fully exit Canada.
Petronas will retain 80% ownership of its Canadian arm, Petronas Energy Canada, one of the largest natural gas rights holders in British Columbia’s Montney basin.
“This is rebalancing, not retreat. Petronas has unlocked value, brought in a strong partner and still kept control,” Jamil told FMT.
Canada: a decade-long bet
Petronas entered Canada in 2012 with its US$5.3 billion takeover of Progress Energy, securing 53 trillion cubic feet of reserves. Since then, it has steadily entrenched its position, achieving record production of over 210,000 barrels of oil equivalent per day by late 2024.
“Over the years, Petronas has pumped in billions, bought out partners and expanded output. It has proven that it is in Canada for the long haul, not just dipping its toes,” said Jamil.
At the centre of this strategy is its 25% stake in LNG Canada, the US$40 billion Kitimat terminal with Shell, Mitsubishi, PetroChina and Kogas.
In July, Petronas shipped its first LNG cargo from Kitimat to Japan, a milestone in its drive to reach 55 million tonnes per annum of LNG supply globally by 2030.
“LNG Canada is the cornerstone of Petronas’s global LNG play. Selling a minority stake does not change that. If anything, it frees up capital to push for Phase 2,” Jamil added.
Squeezed at home
He said the decision reflects the company’s domestic reality rather than any weakness in Canada.
“Petronas’s earnings fell sharply last year due to weaker oil prices, yet dividend demands from Putrajaya remain as steep as ever.
“At the same time, job cuts and Sarawak’s push to take over the gas aggregator role have added more pressure,” he said.
Against that backdrop, Jamil said monetising part of the Canadian portfolio was “sensible”, giving Petronas breathing space to meet fiscal demands at home without compromising its international standing.
Perception vs reality
Still, Jamil cautioned that perception could weigh heavily.
“In the LNG business, perception can outpace reality. Any change in equity stakes makes buyers wonder about long-term reliability, especially with Qatar and the US offering competitive alternatives,” he said.
MidOcean, meanwhile, gains an entitlement of around 0.7 million tonnes per annum of LNG from Kitimat, with an upside if a second phase proceeds.
“The key is what happens next. If Petronas pushes Phase 2, the deal will be seen as prudent stewardship.
“If it stalls, critics may spin it as the start of a retreat,” Jamil said.
A delicate balance
For now, Jamil sees the deal as a balancing act that secures capital, reassures markets and buys Petronas time.
“Petronas has struck the middle ground. It has raised billions, kept its dominant Canadian position and brought in a credible partner.
“Whether this becomes a springboard or a slippery slope depends entirely on what it does next,” he said.