Shell to sell stake in Indonesia’s Masela PSC to Pertamina and PETRONAS

Shell’s subsidiary, Shell Upstream Overseas Services (SUOS), has agreed to sell its 35% stake in Indonesia’s Masela Production Sharing Contract (Masela PSC) to local firm PT Pertamina Hulu Energi (PHE) and PETRONAS Masela. This agreement, including the Abadi gas project, sees a base consideration of $325 million in cash, with an extra contingent amount of $325 million to be paid upon the final investment decision (FID) for the Abadi project.

The sale, effective from January 1, 2023, is expected to finalize in the third quarter of the same year, given regulatory approval from Indonesia’s Ministry of Energy and Mineral Resources.

According to Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, the decision aligns with their disciplined capital allocation focus. However, Shell remains committed to contributing to Indonesia’s energy transition.

Pertamina and PETRONAS Masela to acquire 35% of Masela PSC from Shell. Photo courtesy of Petroliam Nasional Berhad (PETRONAS).

The acquisition aligns with a joint bid between PETRONAS Masela and PHE, intending to acquire Shell’s complete 35% interest in Masela PSC. The remaining 65% stake is held by INPEX Masela Ltd. Tan Sri Tengku Muhammad Taufik, a representative from PETRONAS, marked this acquisition as a significant milestone for PETRONAS’s portfolio expansion in Indonesia, supporting the country’s production target for 2030.

PETRONAS currently partners in six PSCs in various Indonesian locations and operates three offshore PSCs in East Java.