Malaysia's Petronas, through its subsidiary Petronas Masela, and PT Pertamina Hulu Energi have jointly agreed to acquire a 35% stake in the Masela production sharing contract (PSC) offshore Indonesia from Shell Upstream Overseas Services, a subsidiary of Shell, for up to $650 million. The Masela PSC includes the Abadi gas project.

Under the sale and purchase agreements, Pertamina Hulu Energi will acquire a 20% stake, while Petronas Masela will buy a 15% interest in the Masela PSC. The deal involves a base consideration of $325 million in cash and an additional contingent amount of $325 million, payable upon the final investment decision on the Abadi gas project.

The transaction, targeted for completion in Q3 2023, is subject to regulatory approval from Indonesia’s Ministry of Energy and Mineral Resources. Inpex Masela currently operates the Masela Block with a 65% stake.

Zoë Yujnovich, Shell's Integrated Gas and Upstream Director, explained that the decision to sell their participation in the Masela PSC aligns with their focus on disciplined capital allocation. Despite divesting from this project, Shell remains active in Indonesia and continues to contribute to the country's energy transition journey.

Petronas' President and Group CEO, Tan Sri Tengku Muhammad Taufik, reaffirmed the company's commitment to support Indonesia's aim of producing "one million barrels of oil per day and 12 billion standard cubic feet per day of gas by 2030." He further stated that the project provides an opportunity for Petronas to contribute its technical expertise in the development and monetization of the block, strengthening their global LNG portfolio to meet the growing demand for lower-carbon energy from Indonesia and the region.

The agreement was signed during the 47th Indonesian Petroleum Association Convention and Exhibition. Petronas, Pertamina, and Petronas Masela will work together to ensure a smooth transition and successful development of the Masela PSC and Abadi gas project, supporting Indonesia's energy goals.