Production

Shell sells stakes in two offshore Malaysia PSCs

Dec. 13, 2022

Sarawak Shell has agreed to sell its interests in two offshore production sharing contracts (PSCs) in Malaysia’s Baram Delta to Petroleum Sarawak Exploration & Production.

Shell has been a partner in fueling Malaysia’s progress for more than 125 years. The company discovered Malaysia’s first oil onshore, then took the industry offshore, and most recently into the technically challenging depths of deepwater.

Offshore staff

LONDON — Sarawak Shell has agreed to sell its interests in two offshore production sharing contracts (PSCs) in Malaysia’s Baram Delta to Petroleum Sarawak Exploration & Production (PSEP).

These comprise 40% of the Amended 2011 Baram Delta EOR PSC, and 50% of the SK307 PSC, both operated by Petronas Carigali.

PSEP will pay Shell $475 million, plus up to $50 million between 2023 and 2024, dependent on commodity prices. The transaction should clear early next year, pending regulatory approval.

Zoe Yujnovich, Shell’s Upstream director, said, “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 Baram Delta PSC, signed in 2012, was later amended to extend the life and increase recovery from production in the Baram Delta. The SK307 PSC was signed in 1997.

Shell has 19 PSCs in Malaysia, including four exploration PSCs secured earlier this year under Petronas’ Malaysia Bid Round in 2021.

12.13.2022