Officials from Shell, Petronas and PT Pertamina, among others, during the SPA signing ceremony. Credit: Petroliam Nasional Berhad (PETRONAS).

Petronas, through its subsidiary Petronas Masela, and PT Pertamina Hulu Energi have 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 $650m.

Under the sale and purchase agreements (SPA), Pertamina Hulu Energi will acquire a 20% stake while Petronas Masela will buy a 15% interest in the Masela PSC, which includes the Abadi gas project.

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The deal features a base consideration of $325m in cash and an additional contingent amount of $325m, which is payable when the final investment decision is announced on the Abadi gas project.

Due for completion in Q3 2023, the transaction is subject to regulatory approval from Indonesia’s Ministry of Energy and Mineral Resources.

Inpex Masela operates the Masela Block with a 65% stake.

Shell integrated gas and upstream director Zoë Yujnovich said: “The decision to sell our participation in the Masela PSC is in line with our focus on disciplined capital allocation.

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“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 said the company is committed to support Indonesia’s aim of having production of “one million barrels of oil per day and 12 billion standard cubic feet per day of gas by 2030”.

Taufik further added: “The project also provides an opportunity for Petronas to contribute our technical expertise in the development and monetisation of the block, and will further strengthen our global LNG [liquefied natural gas] portfolio towards meeting growing demand for lower-carbon energy from Indonesia and across the region.”

The deal has been signed during the 47th Indonesian Petroleum Association Convention and Exhibition held at the Indonesia Convention Exhibition in BSD City.