(Reuters) -French oil and gas major TotalEnergies will sell its Brunei business to Malaysian independent exploration and production firm Hibiscus Petroleum for $259.4 million, both companies said on Friday.

TotalEnergies said the sale is part of its strategy to sell its mature fields and reallocate cash to promising new locations, such as Namibia, where the French firm will spend 30% of its exploration budget for 2024.

For Hibiscus, the appeal is in acquiring a well-established natural gas asset in a stable neighbouring country where the group hopes it can boost output.

"We have been looking for the right opportunity to enter the Brunei energy industry for some time and ... the additional volumes from this transaction ... will provide an uplift of nearly 85% to our gas production," Hibiscus Petroleum Managing Director Kenneth Pereira said in a statement.

The deal will give the Malaysian firm rights to TotalEnergies Brunei's 37.5% interest in Block B, containing the Maharajalela Jamalulalam (MLJ) field 85 km (53 miles) offshore.

The asset has production rights of up to 15 years, until 2039.

Production from MLJ began in 1999, and TotalEnergies' share last year was 9,000 barrels of oil equivalent per day (boepd).

Hibiscus said it expects the asset to add 7,900 boepd of gas and condensate to the group's total production in 2024, with plans to improve performance over time by cutting operating costs and investing to slow the field's decline.

TotalEnergies said it expects the deal to close in the fourth quarter of 2024. Hibiscus said the purchase won't increase profits for its financial year ending June 2024, but that it expects profits in the future.

Block B is co-owned by Shell Deepwater Borneo (35%) and Brunei Energy Exploration Sdn Bhd (27.5%), a company ultimately owned by the Brunei Minister for Finance Corporation.

(Reporting by Prerna Bedi in Bengaluru; Editing by Sherry Jacob-Phillips and Kim Coghill)

By America Hernandez