Sarawak Shell Berhad (“SSB”), a subsidiary of Shell plc, has agreed to sell its stake in two offshore production sharing contracts (PSC) in the Baram Delta to Petroleum Sarawak Exploration & Production Sdn. Bhd. (“PSEP”). The sale concerns non-operated interests of 40% in the Amended 2011 Baram Delta EOR Production Sharing Contract (“BDO PSC”) and 50% in the SK 307 Production Sharing Contract (“SK307 PSC”). The remaining interests in both PSCs are held by the operator, PETRONAS Carigali Sdn. Bhd. (“PCSB”).
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 PCSB.
“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.