Sarawak Shell Berhad (SSB), a subsidiary of Shell, has completed the previously announced sale of its stake in two offshore production sharing contracts (PSC) in the Baram Delta to Petroleum Sarawak Exploration & Production (PSEP).
The sale, announced in December and effective January 1, concerns non-operated interests of 40% in the Amended 2011 Baram Delta EOR PSC and 50% in the SK 307 PSC.
The remaining interests in both PSCs are held by the operator, Petronas Carigali, and completion of the sale follows regulatory approval from Malaysia Petroleum Management (MPM).
In a statement, Shell said the divestment is in line with its work “to focus its Upstream portfolio”. Shell retains a strong presence in Malaysia’s upstream, gas-to-liquids, downstream and business services sectors and holds 19 Production Sharing Contracts (PSCs) in Malaysia.
According to a December statement, the base consideration for the sale is $475m, with additional payments of up to $50m between 2023 to 2024 contingent on commodity prices.
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.”
In September last year, SSB, together with Petronas Carigali (20%), took a final investment decision (FID) to develop the Rosmari-Marjoram gas project.
The fields are situated 220km off the coast of Bintulu, Sarawak, Malaysia and will be powered by renewable energy, using solar power for the offshore platform. The project is designed to produce 800 MMscf/d with gas production slated to start in 2026.
Petronas Carigali reached the Final Investment Decision (FID) for the development of its Kasawari CO2 Sequestration (CCS) project offshore Sarawak last October.
The CCS project, located in Block SK316 about 200km off Bintulu, is expected to reduce carbon dioxide volume emitted via flaring by 3.3 MtCO2e annually, making it one of the largest offshore CCS projects.
The Southeast Asian oil and gas upstream market is expected to register a CAGR of more than 5.5% between 2022-2027, according to Mordor Intelligence.