Shell has completed the sale of a pair of non-operated stakes in Malaysia’s Baram Delta, concluding a process initiated two years ago.
Sarawak Shell Berhad, a local subsidiary of the London-listed supermajor (LON:SHEL), signed a deal to offload offshore production sharing contracts (PSC) in the area to Petroleum Sarawak Exploration & Production (PSEP) last year, after a process first begun in March 2021.
The sale covers non-operated interests of 40% in the Amended 2011 Baram Delta EOR PSC and 50% in the SK 307 PSC, with formal approval having been granted by Malaysian regulators.
The BDO PSC was signed in 2012 and amended in 2016 and 2019, to extend the life and increase the recovery of the Baram Delta, while Shell has held the latter PSC since its signing in 1997.
The remaining interests in both assets are held by operator Petronas.
Under the terms announced in December, the base consideration for the sale is $475 million, with additional payments of up to $50 million to be made between 2023 and 2024 depending on commodity prices.
The transaction has an effective date of January 1, 2023.
Following completion of the sale divestment, Shell still holds 19 PSCs across Malaysia, and said it would retain “a strong presence” in Malaysia’s upstream, gas-to-liquids, downstream and business sectors.
Speaking last year upstream director Zoe Yujnovich 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.”
Conclusion of the deal also marks continued expansion for PSEP, which last month secured a string of PSCs under Malaysia’s 2022 bid round.