Supermajor Shell completes the sale of Malaysian offshore assets

UK supermajor Shell has completed the sale of non-operated stakes in two offshore production sharing contracts in Malaysia’s Baram Delta to Petroleum Sarawak Exploration & Production (PSEP).

The deal involved Shell’s 40% interest in the Amended 2011 Baram Delta enhanced oil recovery PSC and its 50% equity in the Block SK 307 PSC off the coast of Sarawak, East Malaysia. The remaining stakes in both assets are held by their operator, Malaysia’s national upstream player Petronas Carigali.

The Baram Delta PSC was signed in 2012 and subsequently amended twice with the aim of extending the life and increasing the recovery of the Baram Delta, while the SK 307 PSC was inked back in 1997.

Finalisation of the Shell-PSEP deal — financial terms of which were not divulged — followed regulatory approval from Malaysia Petroleum Management (MPM). The transaction has an effective date of 1 January 2023.

Shell noted this divestment is in line with the company’s work to focus its upstream portfolio. Shell retains a presence in Malaysia’s upstream, gas-to-liquids, downstream and business services sectors.

Following this divestment, Shell has interests in 19 PSCs — producing and exploration blocks — in Malaysia and is forging ahead with the development of its Rosmari-Marjoram project for which it took the final investment decision last September.