Petronas of Malaysia against the seizure of Luxembourg assets | oil and gas

The asset seizure relates to a $15 billion legal dispute over an agreement signed by the sultan 144 years ago.

Malaysia’s state-owned oil company Petronas said it would defend its legal position after two of its Luxembourg subsidiaries were seized.

The units were seized by descendants of a late sultan, aggravating a $15 billion legal dispute over a deal signed 144 years ago, the Financial Times reported earlier, citing lawyers.

The company said on Tuesday that its Petronas Azerbaijan (Shah Deniz) and Petronas South Caucasus units received a “Saisie-arret” on Monday, essentially a seizure order issued by bailiffs in Luxembourg.

Petronas said the action taken against it was “baseless”. He added that the units had previously disposed of their assets in Azerbaijan and the proceeds had already been repatriated.

The seizure follows a decision by a French arbitration tribunal in February ordering Malaysia to pay $14.9 billion to the heirs of the last Sultan of Sulu, to honor an agreement he signed in 1848 with a company commercial use of its territory, now known as the Malaysian state of Sabah.

Malaysia took over the arrangement after independence from Britain, paying a token sum to heirs each year.

But the payments were stopped in 2013, with Malaysia arguing that no one else had a claim on Sabah, which was part of its territory.

Malaysian Prime Minister Ismail Sabri Yaakob pledged in March to fight the French court’s ruling, saying his government would not accept anyone’s claim on the state.