Shell looking to shed interests in blocks off Malaysia

Oil major Shell is exploring options to sell its non-operated interests in the Amended 2011 Baram Delta EOR production sharing contract (PSC) and the SK 307 PSC off Malaysia.

The two assets are located offshore Sarawak, Malaysia, and are operated by Petronas Carigali and Shell’s subsidiary – Sarawak Shell Berhad – is a non-operating partner.

Petronas Carigali holds a 60 per cent equity interest in the Amended 2011 Baram Delta EOR PSC while Shell as the partner through Sarawak Shell Berhad holds the remaining 40 per cent equity interest.

The Amended 2011 Baram Delta EOR PSC was signed in 2016, to extend the life and increase the recovery factor of the Baram Delta. The Amended 2011 Baram Delta EOR PSC comprises the Bokor, Baronia, Fairley Baram, Bakau, and Siwa oil fields as well as the Tukau Timur and Baronia gas fields.

In the SK307 PSC, Petronas Carigali holds a 50 per cent equity interest as the operator. Sarawak Shell Berhad holds the remaining interest. The SK307 PSC was signed in 1997 and currently produces from the Baronia Barat oil field.

Shell said last week that the decision was in line with the group’s strategy for its upstream business to become more focused and to increase its resilience and competitiveness.

“Shell Malaysia remains committed to supporting the operator in delivering safe and smooth operations until completion of a sale to a credible buyer.

“Malaysia remains an important country to the Group with a continued strong presence in its upstream, gas-to-liquids, downstream and business operations sectors“, the company said.

The company added that the upstream business in Malaysia was identified as one of its upstream’s nine Core Performance Units worldwide.

In recent company news, Shell disclosed in its annual report last Thursday that the pay package of Shell CEO Ben van Beurden dropped by 42 per cent in 2020.

Van Beurden’s total remuneration for 2020 was $6.93 million compared with about $11.95 million the year before. It is worth noting that his remuneration also dropped by 51 per cent in 2019.