Petronas and BASF sign MOU to explore new joint investment

6 December 2010 – KUALA LUMPUR – PETRONAS and BASF today signed a Memorandum of Understanding (MoU) to undertake a joint feasibility study to produce specialty chemicals in Malaysia, a move that would extend the two parties’ existing business collaboration in the country. The partners are considering a potential joint investment sum of approximately RM4.0 billion (€1.0 billion).

Under the terms of the MoU, the two parties will evaluate the technical, commercial and economic viability of jointly owning and operating world-scale facilities for the production of specialty chemicals including non-ionic surfactants, methanesulfonic acid, iso-nonanol as well as other C4-based products. The final scope of the investments will be determined following the outcome of the joint feasibility study, which is targeted to be completed in 2011.

The MoU was signed at the PETRONAS headquarters in Kuala Lumpur. Signing on behalf of PETRONAS were Datuk Wan Zulkiflee Wan Ariffin, Executive Vice President of Downstream Business, and Encik Kamaruddin Zakaria, Vice President of Downstream Operations. Dr. Martin Brudermüller, member of the Board of Executive Directors of BASF SE, responsible for Asia Pacific, and Ms. Saori Dubourg, President, Asia Pacific, BASF, signed on behalf of BASF.

Datuk Wan Zulkiflee Wan Ariffin said: “The development of a new specialty chemical products portfolio is an important component of PETRONAS’ plan to further grow the downstream petrochemical business, as part of its integrated plan to be a key player in the region as well as to spur domestic investment in the oil, gas and petrochemical industries.”

Dr. Martin Brudermüller said: “With the rapid growth of chemical markets in Asia Pacific, we are further expanding our specialty chemical business. Our joint venture with PETRONAS, based on a long-standing and successful partnership, is an excellent, well-established and competitive production platform in Asia. By expanding our local production base in Malaysia, we can further improve our ability to supply our customers in Asia, from Asia.” According to its Asia Pacific Strategy 2020, BASF intends to produce 70% of Asia Pacific sales in the region, with investments of €2.0 billion between 2009 and 2013.

The proposed move by PETRONAS and BASF will build on their successful strategic partnership in the country, established since 1997. The partnership, via BASF PETRONAS Chemicals Sdn Bhd (in which BASF has 60% shares) currently own and operate an integrated complex in Gebeng, Pahang that produces acrylic monomers, oxo products and butanediol. For the subsequent phase of the collaboration, PETRONAS Chemicals Group Bhd and BASF will jointly evaluate the outcome of the feasibility study and will adopt it as part of their strategic growth plans, if technically and commercially viable.

About PETRONAS

PETRONAS is a Global Fortune 500 company wholly owned by the Government of Malaysia, principally involved in all spectrum of integrated oil, gas and petrochemical industries. For the year ended 31 March 2010, PETRONAS recorded a group revenue of US$62.5 billion. More information on PETRONAS is available on www.petronas.com.

About BASF

BASF is the world’s leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics and performance products to agricultural products, fine chemicals and oil and gas. As a reliable partner BASF creates chemistry to help its customers in virtually all industries to be more successful. With its high-value products and intelligent solutions, BASF plays an important role in finding answers to global challenges such as climate protection, energy efficiency, nutrition and mobility. BASF posted sales of more than €50 billion in 2009 and had approximately 105,000 employees as of the end of the year. Further information on BASF is available on the Internet at www.basf.com.