13th Dec 2022 07:40
(Alliance News) - Shell PLC on Tuesday said that efforts have continued to "focus" its Malaysian portfolio, as it announced the sale of two offshore production sharing contracts in the Baram Delta.
Sarawak Shell Bhd, a subsidiary of the London-based oil major, has agreed to sell its stake in both contracts to Petroleum Sarawak Exploration & Production Sdn Bhd.
The base consideration of the sale is USD475 million, with additional payments of up to USD50 million between 2023 and 2024, contingent on commodity prices.
The contracts are both non-operated interests, namely a 40% holding in the amended 2011 Baram Delta EOR PSC, and 50% in the SK307 PSC. The operator of both assets, Petronas Carigali Sdn Bhd, a subsidiary of Malaysian government-owned Petronas Bhd, holds the remaining interests.
The sale has an effective date of January 1 next year and is set to complete in early 2023. It is, however, contingent on regulatory approvals and consent from Petronas.
"This decision is in line with our work to continue focusing our portfolio," said Upstream Director Zoe Yujnovich.
"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 currently has 19 production sharing contracts in Malaysia.
It signed four exploration PSCs earlier this year, arising from Petronas's Malaysia bid round in 2021, which was concluded this year. In September, the company also announced investment in the natural gas project, Rosmari-Marjoram in Sarawak, Malaysia.
By Holly Beveridge; Alliance News reporter
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