KUCHING, Dec 16: Sarawak Shell Berhad, a subsidiary of Shell plc, has agreed to sell its stake in two off-shore production sharing contracts (PSCs) in Sarawak’s Baram Delta for US$475 million to Petroleum Sarawak Exploration & Production Sdn Bhd.
According to a press statement released on Shell Global’s website on Dec 13, the sale concerns Sarawak Shell Berhad’s 40 per cent and 50 per cent stake in the Baram Delta EOR and SK 307 production sharing contracts, respectively.
Shell said an additional payment of up to US$50 million will be paid between 2023 to 2024, contingent on commodity prices.
It added that the transaction will be effective on Jan 1, 2023, and is targeted to be completed by early 2023, subject to completion of conditions which include, among others, regulatory approval to be obtained from Petronas and consent from the operator Petronas Carigali Sdn Bhd (PCSB) which owns the remaining interests in both PSCs.
Shell’s Upstream director Zoe Yujnovich said the decision was in line with its work to continue focusing on its upstream business.
“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,” he added.
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 PSC and SK307 PSC was announced by Shell in March 2021.
Shell currently has 19 PSCs in Malaysia, with four exploration PSCs signed earlier this year, arising from Petronas’ Malaysia Bid Round in 2021, which was concluded this year.
On Sept 5, 2022, Shell also announced investment in Rosmari-Marjoram in Sarawak, a natural gas project, which will be developed with Sarawak Shell Berhad (operator, 80 per cent) and PCSB (20 per cent). — DayakDaily