Shell has agreed to sell its participating interest in Indonesia’s Masela Production Sharing Contract and the associated Abadi gas project.
The 35% interest in the deepwater block will be sold to Indonesia’s PT Pertamina Hulu Energi and Petronas Masela. Pertamina Hulu Energi will take a 20% share and Petronas a 15% share.
The base consideration for the sale is $325 million in cash with an additional contingent amount of $325 million to be paid when the final investment decision is taken on the Abadi gas project.
INPEX Corporation holds 65% operating interest in the Masela Production Sharing Contract and is the operator of the Abadi gas project located in the Masela Block, 150 kilometers offshore Saumlaki in Maluku province, Indonesia.
"The decision to sell our participation in the Masela PSC is in line with our focus on disciplined capital allocation,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director. “Shell remains active in Indonesia and continues to contribute to the country’s energy transition journey.”
Petronas Group CEO Muhammad Taufik said:“This acquisition marks a significant milestone in Petronas’ portfolio expansion in Indonesia. Petronas is excited to participate in the Masela Block which is one of the country’s key strategic projects. Our participation underscores the commitment in supporting Indonesia’s production target to achieve one million barrels of oil per day and 12 billion standard cubic feet per day of gas by 2030.”
Reuters reports that Abadi LNG, led by Japan's Inpex, will use gas to produce 9.5 million tons of LNG per year for export from the proposed terminal.
The transaction has an effective date of January 1, 2023 and is targeted to be completed in Q3 2023.