Under the terms of the deal, Lundin has agreed to sell 100% issued share capital of Lundin Services, which owns the FPSO Bertam, to Malaysian state-backed M3nergy.

Lundin Petroleum president and CEO Alex Schneiter said: "We are very pleased to be doing this deal with M3nergy, an experienced Malaysian FPSO owner.

"Owning infrastructure assets is not part of Lundin Petroleum’s core strategy and this transaction will allow us to redeploy this capital into other areas of our business to fund our value driven growth."

The transaction, which is subject to certain completion conditions, including finalization of M3nergy’s external financing, is expected to be completed during the first quarter of 2016.

In 2015, an extensive upgrade and life extension program has been carried out by Lundin Petroleum on the FPSO Bertam.

The FPSO is currently operating on the producing Bertam field located within the PM307 production sharing contract (PSC) area, 160km off the shore of Kuantan in Peninsular Malaysia.

Located in water depth of approximately 76m, the Bertam oilfield is estimated to hold gross reserves of 18.4 million barrels of oil equivalent.

The block, which covers an area of approximately 6,126km², is operated by Lundin Petroleum with 75% stake while Petronas Carigali owns the remaining 25% interest.