Shell Upstream Overseas Services, a subsidiary of the global energy company Shell plc, has entered into an agreement to sell its 35 percent stake in Indonesia’s Masela Production Sharing Contract (Masela PSC).
The acquiring parties are PT Pertamina Hulu Energi (PHE) and PETRONAS Masela. The transaction is set at a base consideration of $325 million in cash, and an additional contingent amount of $325 million will be paid upon the final investment decision (FID) on the Abadi gas project. The sale is expected to be finalized during the third quarter of 2023.
The Masela PSC is located in the Masela Block, situated 150 kilometers offshore Saumlaki in Maluku province, Indonesia. INPEX Corporation, the Japanese oil and gas company, currently holds a 65 percent operating interest in the Masela PSC and acts as the operator of the Abadi gas project.
Shell’s interest in the Masela PSC dates back to 2011 when the company acquired its stake. With the recent decision to divest its holdings, Shell aims to realign its portfolio and focus on other strategic ventures in the energy sector.
In Indonesia, Shell companies are actively engaged in Downstream businesses, including mobility, lubricants, and marine operations. Notably, in November 2022, Shell Indonesia successfully completed the expansion of its Lubricant Oil Blending Plant, doubling its production capacity to cater to the increasing demand for lubricant products. The facility now has the capability to produce up to 300 million liters of lubricants per year.
Furthermore, Shell’s Mobility business oversees and operates 210 fuel stations across Indonesia as of June 30, 2023. These fuel stations play a crucial role in providing energy solutions and services to consumers in the region.
As Shell continues to evolve its business strategy, the divestment from the Masela PSC represents a strategic move to optimize its operations and investments in the Indonesian energy market.
The completion of this transaction is subject to regulatory approvals and standard closing conditions. Both Shell and the acquiring parties are looking forward to a seamless transition of ownership, ensuring continued growth and development in the Indonesian energy sector.