Indonesia M&A - Pertamina and PETRONAS to acquire Shell's stake in the Masela PSC (Abadi project)

(Originally published on July 25, 2023)

So there we have it, Shell have announced a deal to divest their 35% interest in the Masela PSC to Pertamina (20%) and PETRONAS (15%) for a headline $650 million ($325 million on completion and $325 million at FID). I had suspected that we would see this announcement this week to coincide nicely with the IPA conference in Jakarta. However, I must admit that I hadn't expected PETRONAS to take a stake. For both parties, this could represent a great deal as they get access to a stake in a project that is pretty much development ready, with over 18.5 Tcf of certified gas resource. However, the project is capital intensive and will need to find its space in the global LNG market at a time when there is are a lot of proposed projects looking to take advantage of the (currently) tight market.