Shell to sell stakes in two offshore PSCs in Baram Delta, Malaysia to PSEP
Shell, through its subsidiary Sarawak Shell Berhad (SSB), has signed a deal worth up to $525m to divest its stake in two offshore production sharing contracts (PSCs) in the Baram Delta in Malaysia to Petroleum Sarawak Exploration & Production (PSEP).
The deal includes Shell’s non-operated stakes of 40% in the Amended 2011 Baram Delta EOR production sharing contract (BDO PSC) and a 50% stake in the SK 307 production sharing contract (SK307 PSC).
Petronas Carigali holds the remaining stakes of 60% and 50%, respectively, in the BDO PSC and the SK307 PSC.
Shell upstream director Zoe Yujnovich said: “This decision is in line with our work to continue focusing our portfolio.
“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.”
The BDO PSC, which was signed in 2012, was modified in 2016 and 2019 for prolonging the life and boosting the recovery of the Baram Delta.
The SK307 PSC, on the other hand, was signed in 1997.
According to Shell, the deal has a base consideration of $475m. Shell will be entitled to receive additional payments of up to $50m between 2023 to 2024, which will be subject to commodity prices.
The deal, which is subject to regulatory approval to be given by Petronas, consent from Petronas Carigali, and other conditions, is aimed to be completed early next year.
Presently, Shell has 19 PSCs in Malaysia, and earlier this year, the company signed four exploration PSCs in the country.
In September 2022, Shell alongside its partner Petronas Carigali took a final investment decision to develop the Rosmari-Marjoram gas project in Malaysian waters.
Published: 14-12-2022
