OGX, Petronas may go to arbitration

MALAYSIA'S state oil firm Petroliam Nasional (Petronas) has rescinded a US$850 million agreement with Brazil's OGX Petroleo & Gas Participacoes SA to buy a 40 per cent interest in two of its oil blocks, the Rio de Janeiro-based company said in a stock exchange filing in Brazil late on Monday.

The conditional deal announced in May had been seen as crucial to beleaguered OGX, which became Brazil's first oil company to file for bankruptcy.

In October, OGX filed a motion in a Rio court seeking protection from its creditors over US$5 billion in debt. The firm, controlled by Eike Fuhrken Batista, once touted as one of the richest men in the world, could run out of cash by year-end, according to news reports.