Sarawak Shell Berhad, a Shell subsidiary, has agreed to sell its stake in two offshore production sharing contracts (PSC) in Malaysia’s Baram Delta to Petroleum Sarawak, an exploration and production firm.

The stakes would sell for $475m, with extra payments of up to $50m between 2023 and 2024, depending on commodities prices. The deals go into effect on 1 January 2023, and the company expects the deals to be finalised in early 2023, subject to the completion of requirements such as Petronas’ regulatory approval and Petronas Carigali Sdn Bhd’s consent.

Sarawak Shell Berhad owns 40% and 50% of the Baram Delta EOR and SK 307 production sharing contracts, respectively.

Zoe Yujnovich, Shell’s upstream director, said: “This decision is in line with our work to continue focusing our portfolio. 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, [and] in the transition to a low-carbon energy system.”

Shell has a strong presence in Malaysia’s upstream, gas-to-liquids, downstream, and business services sectors. Shell confirmed its intention to sell its stakes in the Baram Delta EOR PSC and the SK307 PSC in March 2021.

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By GlobalData