Shell signs deal to sell Indonesia Masela block interest

Shell Upstream Overseas Services Ltd. will sell its 35% participating interest in Indonesia’s Masela production sharing contract in Masela block, 150 km offshore Saumlaki in Maluku province, Indonesia. The sale, to Indonesia’s PT Pertamina Hulu Energi (PHE) and Petronas Masela Sdn. Bhd., includes Shell’s interest in the Abadi LNG project.

Reports of Shell’s plans to sell its interest in the block containing Abadi gas field in the Arafura Sea were noted in 2020 (OGJ Online, July 8, 2020).

The Abadi project is expected to produce about 9.5 million tonnes/year of LNG and up to about 35,000 b/d of condensate, according to operator INPEX Corp.’s website. The project is also expected to supply 150 MMcfd via pipeline to address local demand for natural gas.

In April, INPEX Masela Ltd. submitted a revised plan of development for the Abadi LNG project in the block, incorporating a carbon capture and storage component (OGJ Online, Apr. 6, 2023).

Base consideration for the sale is $325 million in cash with an additional contingent amount of $325 million to be paid when final investment decision (FID) is taken on the Abadi LNG project.

The deal is expected to complete in third-quarter 2023, subject to completion of conditions which include regulatory approval from Indonesia’s Ministry of Energy and Mineral Resources.

INPEX is operator of the Abadi gas project and holds 65% interest in the Masela PSC.