Malaysia’s national energy giant Petronas and parent of Malaysia Marine and Heavy Engineering (MMHE) has denied there is any truth in the recent news reports of a merger between MMHE and compatriot Sapura Energy.

A possible merger has been at the forefront of talk within the Kuala Lumpur energy industry of late, following local media reports that preliminary discussions had been discretely held between MMHE and Sapura’s major shareholders — namely Petronas and Permodalan Nasional, respectively.

“Petronas refers to recent news reports speculating a merger between Malaysia Marine and Heavy Engineering Holdings and Sapura Energy.

“Petronas wishes to categorically deny these speculations,” the company said on Monday.

“Any investment or divestment consideration within the Petronas Group has always been and will continue to be strictly guided by a board-approved and management-enforced framework,” Petronas said in a statement that did not specifically address whether any preliminary talks might have been held.

Despite both Sapura and MMHE management via corporate spokespeople denying knowledge of any such talks to Upstream, some third-party sources based in Kuala Lumpur and Singapore claimed to have heard that such early discussions had indeed been held.

This is not the first time that talk of some form of tie-up between MMHE and Sapura has gained traction and been reported by local media.

In March 2022, Petronas found itself having to formally state it would not be acquiring cash-strapped Sapura — a deal which would have brought it under the same umbrella as MMHE and MISC.

Referencing news reports, comments in the media and industry speculation on its purported “talks with the government on a proposal to take a significant stake” in Sapura Energy, Petronas told Upstream at the time that it “wishes to categorically deny these reports and speculation”.

A possible tie-up between Malaysia’s leading two offshore and marine contractors has been suggested several times over the years. Singapore’s Sembcorp Marine earlier this year acquired compatriot and historic rival Keppel Offshore & Marine some two decades after a potential merger is first known to have been touted.