Shell subsidiary Sarawak Shell Berhad will sell its stake in two offshore production sharing contracts (PSC) to Petroleum Sarawak Exploration & Production Sdn. Bhd. for a base consideration of US$475 million, according to a press release on Dec. 13.

Located in the Baram Delta in Malaysia, the company is selling non-operated interests in the Amended 2011 Baram Delta EOR Production Sharing Contract (40%) and the SK 307 Production Sharing Contract (50%), with the remaining interests held by operator Petronas Carigali Sdn. Bhd.

"This decision is in line with our work to continue focusing our portfolio," Shell upstream director Zoe Yujnovich said in the release. "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."

Effective Jan. 1, 2023, the companies expect the transaction to be completed early next year contingent on regulatory approval from Petronas, among other conditions.

In addition to the base consideration of $475 million, Sarawak Exploration & Production will also provide additional payments of up to $50 million based on commodity prices between 2023 and 2024.

The Baram Delta EOR PSC was signed in 2012 with amendments made in 2016 and 2019 to extend the life and increase the recovery of the Baram Delta, according to the release, while the SK 307 PSC was signed in 1997 with no amendments.

Shell currently holds 19 Malaysian PSCs, having signed four exploration PSCs this year following Petronas' 2021 Malaysia Bid Round.