SINGAPORE: Malaysian state-owned oil and gas firm Petronas is aiming to sell a large minority stake in a prized upstream local gas project for up to $1 billion as it seeks to raise cash and cut development costs, two sources familiar with the matter said. Petroliam Nasional Bhd (Petronas) is looking to sell a stake of as much as 49 percent in the SK316 offshore gas block in Malaysia’s Sarawak state, the sources told Reuters, a move that would be among its first major recent sales as it grapples with oil prices that have slumped by half over two-and-a-half years. That slide has squeezed the cash flows of Petronas [PETR.UL], hurt its earnings and forced it a year ago to announce a 50 billion ringgit ($11.2 billion) cut in capital expenditure over four years. Petronas, which accounts for a third of Malaysia’s oil and gas revenue, has also cut its dividend. Sources had told Reuters in September it is considering selling its majority stake in a $27 billion Canadian liquefied natural gas (LNG) plant, although the company denied it. It is now working with an investment bank on the SK316 gas block stake sale and kicked off the process this month, one of the sources said. Petronas did not respond to a request for comment. Petronas is currently gauging interest from potential buyers, said the sources, who declined to be identified as they were not authorized to speak about the matter. Gas from the NC3 field in the SK316 block feeds Malaysia’s LNG export project, known as LNG 9, Petronas’ joint venture with JX Nippon Oil & Energy Corp that started commercial production in January. The sources said the stake is expected to include a combination of the producing NC3 gas field, the potential development of the Kasawari field in the same block and other exploration acreage in the block. The funds raised could contribute to the future development of the Kasawari field, one of the largest non-associated gas fields in Malaysia, which has an estimated recoverable hydrocarbon resource of about three trillion standard cubic feet. Petronas put on hold plans to develop the field in 2015 after oil and gas prices fell, according to media reports.