Royal Dutch Shell is reportedly selling its participation in various offshore fields in Malaysia, according to media sources.
The supermajor has allegedly signed a deal with Hibiscus Petroleum to sell its 50% stake in the 2011 North Sabah Enhanced Oil Recovery production sharing contract (PSC), which includes four fields and associated infrastructure.
“This is a significant milestone for Hibiscus Petroleum. When we created Hibiscus Petroleum, this was our goal, to invest in Malaysia and to apply our knowledge and experience to create value in our own backyard,” Hibiscus Petroleum Managing Director, Kenneth Pereira, said.
Shell Sells Malaysia Offshore Fields
Shell’s interest in the contract will be acquired by Hibiscus Petroleum for a total of US$25 million (£20.51 million).
With this acquisition, expected to be completed in 2017 and subject to regulatory approvals, Hibiscus will also acquire operatorship responsibilities.
Shell’s Gumusut-Kakap platform offshore Sabah
The contract includes four producing oil fields (St. Joseph, South Furious, SF30 and Barton), pipeline infrastructure and the Labuan Crude Oil Terminal.
As well as this, the contract provides long-term production rights until 2040, with future development opportunities.
Hibiscus Petroleum Turns into Offshore Operator
According to Pereira, this acquisition comes as an opportunity for Hibiscus Petroleum to demonstrate its capabilities and evolve into a late field life operator.
“I firmly believe that this acquisition will result in long-term value for the company and its shareholders, Petronas, Sabah and the nation as a whole,” he told media sources.
“This transaction is part of Shell’s review of its upstream portfolio, to focus on acreage positions that hold or can reach the scale required by Shell,” Shell told media sources.
Currently, Sabah Shell Petroleum (25%) is the operator of the PSC, in partnership with Shell Sabah Selatan (25%) and Petronas Carigali (50%).
According to Hibiscus Petroleum, total oil production averaged 18,000 barrels per day (bpd) in 2015.