Shell has signed three production sharing contracts (PSC) with Malaysian state-run company Petronas for oil and gas exploration, offshore Sabah and Sarawak.

The PSCs have been signed via the Sabah Shell Petroleum Company (SSPC), Shell Sabah Selatan (SSS), and Sarawak Shell (SSB).

These contracts cover blocks SK439/SK440 in shallow water, off the coast of Sarawak, and exploration of blocks SB-2W and SB-X, off the coast of Sabah.

Shell Malaysia chairman and Malaysia upstream senior vice-president Ivan Tan said: “The signing of these PSCs marks another growth milestone for Shell, in Malaysia.”

The PSCs have been awarded in the Malaysia Bid Round (MBR) 2021, which also covered offshore exploration block SB412.

For block SB412, Petronas awarded a PSC to PTTEP HK Offshore, and SapuraOMV Upstream.

Shell and co-venturers Petronas Carigali (PCSB) signed the joint operating agreement (JOA) for the SB-2W and SB-X offshore blocks.

Shell also signed a JOA with Petroleum Sarawak Exploration and Production (PSEP) for the SK439/SK440 block.

Shell Sabah Petroleum started work on Phase III of the Gumusut-Kakap development, located within blocks J and K, approximately 120km offshore Sabah, Malaysia.

Phase III involves the drilling of four wells, including two producer wells and two water injection wells.

The four wells, which are expected to achieve first oil this year, will be tied back to the SSPC-operated Gumusut-Kakap floating production system (GK-Semi FPS), located offshore Sabah.

Ivan added: “The signing of these PSCs, together with the commencement of Phase three of the Gumusut-Kakap development, demonstrate Shell’s continued commitment to the country, and we will work to deliver these projects in a safe and responsible manner.”

In a separate announcement, Shell signed an agreement with the German LNG Terminal to receive LNG from the planned LNG terminal at the North Sea port of Brunsbuettel, Germany.

The move forms part of Shell’s efforts to reduce its dependency on Russian pipeline gas.