Shell sells offshore production-sharing contracts in Malaysia for $475 million

(WO)— Sarawak Shell Berhad, a subsidiary of Shell Plc, has agreed to sell its stake in two offshore production-sharing contracts in the Baram Delta to Petroleum Sarawak Exploration & Production.

The sale concerns non-operated interests of 40% in the Amended 2011 Baram Delta EOR Production Sharing Contract and 50% in the SK 307 Production Sharing Contract. The remaining interests in both production-sharing contracts are held by the operator, PETRONAS Carigali.

The base consideration for the sale is $475 million, with additional payments of up to $50 million between 2023 to 2024 contingent on commodity prices. The transaction has an effective date of Jan. 1, 2023, and is targeted to be completed in early 2023, subject to the completion of conditions which include regulatory approval and consent to be obtained from PETRONAS.

“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 Baram Delta EOR Production Sharing Contract and SK 307 Production Sharing Contract was announced by Shell in March 2021.