KUALA LUMPUR – Oil and gas giant Shell is divesting several of its offshore fields in Malaysia, in particular those in Sabah waters.
The PSC comprises of four producing oil fields and associated infrastructure
The company has signed a deal with Hibiscus Petroleum to sell its entire fifty percent participating interests in the 2011 North Sabah Enhanced Oil Recovery production sharing contract (“PSC”).
Hibiscus will buy Shell’s interests in four producing oil fields and associated infrastructure for US$25 million. This amount does not include post completion adjustments and reimbursements to Shell.
“With the acquisition of Shell’s interest, Hibiscus will also acquire operatorship responsibilities,” according to a statement from Hibiscus.
“This acquisition is expected to complete in 2017 and is subject primarily to obtaining regulatory approval of Petronas and its subsidiary Petronas Carigali.”
Petronas is a fifty percent joint venture partner in the Production Sharing Contract.
The PSC comprises of four producing oil fields and associated infrastructure. These include St Joseph, South Furious, SF30, and Barton oilfields. It also contains pipeline infrastructure and the Labuan Crude Oil Terminal.
According to Hibiscus, total oil production averaged approximately 18 thousand barrels per day in 2015. The PSC provides long-term production rights until 2040 with identified future development opportunities.
Kenneth Pereira, Managing Director of Hibiscus Petroleum said the acquisition is an opportunity to demonstrate the company’s capabilities.
He added that the move will further evolve the Company into a late field life operator “that will deliver long-term value to Malaysia.”
Pereira said: “We look forward to working with Petronas Carigali and Petronas and strengthening existing relationships there. 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.
“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.”