Shell (LON:SHEL) said Tuesday that it has agreed to sell its stake in two offshore production sharing contracts (PSCs) in Malaysia’s Baram Delta to Petroleum Sarawak Exploration & Production (PSEP).
The sale concerns non-operated interests of 40% in the Amended 2011 Baram Delta Enhanced Oil Recovery (EOR) PSC (BDO PSC) and 50% in the SK 307 PSC. The remaining interests in both PSCs are held by the operator, Petronas Carigali.
The base consideration for the sale is US$475 million, with additional payments of up to US$50 million between 2023 to 2024 contingent on commodity prices. The transaction has an effective date of January 1, 2023, and is targeted to be completed in early 2023, subject to completion of conditions which include, among others, regulatory approval to be obtained from Petronas, and consent from Petronas Carigali.
“This decision is in line with our work to continue focusing our portfolio”, said Zoe Yujnovich, Shell’s Upstream Director. “Malaysia remains one of our eight core Upstream positions worldwide and we will continue to help power the country’s progress by investing in the oil and gas needed today, as well as in the transition to a low-carbon energy system.”
Shell retains a strong presence in Malaysia’s upstream, gas-to-liquids, downstream and business services sectors. The intention to divest its interests in the BDO PSC and SK307 PSC was announced by Shell in March 2021.
Petroleum Sarawak Exploration & Production is a wholly owned subsidiary of Sarawak state energy company PETROS.
With these two latest additional PSCs, PETROS has further expanded its footprints and holds equity positions in eight PSCs (after completion) since incorporation in July 2017.