# Pertamina, Petronas to pay up to $650 million for Shell’s Masela gas stake Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-07-25 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Pertamina, Petronas to pay $650M for Shell Masela gas stake Meta Description: Pertamina and Petronas agreed to purchase Shell's 35% stake in the Masela gas block for up to $650 million, advancing the project after delays. URL: https://financedigest.com/pertamina-petronas-to-pay-up-to-650-million-for-shells-masela-gas-stakehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-07-25t030151z2lynxmpej6o01ortroptp4global-lng-1736813727316-compressed.jpg) # Pertamina, Petronas to pay up to $650 million for Shell’s Masela gas stake By Fransiska Nangoy and Bernadette Christina TANGERANG, Indonesia (Reuters) -Indonesia’s Pertamina and Malaysia’s Petronas signed an agreement with Shell on Tuesday to buy its 35% stake in the Masela natural gas block for up to $650 million, moving the project forward after years of delay. Pertamina Hulu Energi (PHE) will take 20% and Petronas Masela Sdn Bhd will take a 15% stake in the Indonesian gas block, the companies said at a signing ceremony at the Indonesia Petroleum Association conference. The base consideration for the sale is $325 million with a contingent amount of $325 million to be paid when the final [investment decision is taken on the Abadi liquefied natural gas](https://www.financedigest.com/naturgys-profit-rises-on-lng-gains-soothing-shareholders-by-pietro-lombardi-madrid-reuters-spanish-power-utility-naturgy-reported-on-monday-an-88-jump-in-profit-for-the-first-six-months-of.html "Naturgy’s profit rises on LNG gains, soothing shareholders By Pietro Lombardi MADRID (Reuters) – Spanish power utility Naturgy reported on Monday an 88% jump in profit for the first six months of the year, boosted by strong earnings at its liquefied natural gas (LNG) business, which could help it to win over restive investors. Earlier this month, the company said it would increase its dividend floor through 2025 while trimming expected investment, as it sought to make rewarding shareholders a priority. Pleasing them has become a focus as Naturgy considers changes that could reshape the company and after arguments over the potential appointment of a chief executive. Naturgy’s first-half net profit jumped to 1.05 billion euros (.16 billion), boosted by its liquefied natural gas (LNG) business. Shares were down 0.2% in mid-morning trading, bucking deeper declines, in particular for Spain’s blue-chip banks and utilities after a general election on Sunday produced no clear winner. Renta 4 Banco analyst Angel Perez Llamazares said Naturgy performed better than expected, adding “cash flows also beat our expectation,” and debt fell more than expected. After natural gas prices hit record levels last year, Naturgy said a fall in procurement costs this year and hedging gains had boosed profits. In the first half of the year, the company “exceeded the objectives of operating efficiency, cash generation, investment materialisation and debt reduction,” Executive Chairman and CEO Francisco Reynes said. After rival Iberdrola named a separate CEO last year, Naturgy is the only large energy company in Spain to combine the roles of executive chairman and CEO. Earlier this month, the company raised the dividend floor to 1.40 euros a share, from 1.20 euros. Operating profit (earnings before interest, tax, depreciation and amortisation) is expected to reach 5.1 billion euros, compared with a previous guidance of 4.8 billion euros. It said it was targeting net profit of 1.8 billion euros in 2025. Naturgy also relaunched its plan to split regulated infrastructure operations and liberalised energy businesses into two listed companies. The project had been suspended after the Ukraine war disrupted energy markets and analysts are still sceptical. “We believe it is unlikely that Naturgy will be able to implement its asset split in the short term and it is also unlikely that a big change in the shareholding of the company would occur,” said RBC analyst Fernando Garcia. ( = 0.8986 euros) (Reporting by Pietro Lombardi, editing by Inti Landauro and Barbara Lewis)") (LNG) project, Shell said in a statement. Abadi LNG, led by Japan’s Inpex Corp, will use gas from the Masela block, located 150 km (93 miles) offshore of Saumlaki in Maluku province, to produce 9.5 million metric tons per [year of LNG at its peak](https://www.financedigest.com/world-stocks-rally-nikkei-closes-at-33-year-peak.html "World stocks rally, Nikkei closes at 33-year peak") which will be exported from the proposed terminal. The transaction should be completed in the third quarter, subject to several conditions, including regulatory approval from [Indonesia’s Ministry of Energy and Mineral](https://www.financedigest.com/amman-mineral-makes-firm-debut-in-indonesias-biggest-ipo-this-year.html "Amman Mineral makes firm debut in Indonesia’s biggest IPO this year") Resources, Shell added. “The decision to sell our participation in the Masela PSC is in line with our focus on disciplined capital allocation,” said Zoe Yujnovich, Shell’s integrated gas and upstream director. Pertamina CEO Nicke Widyawati said in a statement that purchase of the stake was intended to ensure adequate [oil and gas supply](https://www.financedigest.com/oil-climbs-close-to-april-peak-on-tighter-supply.html "Oil climbs close to April peak on tighter supply") for national energy needs. She touted the [experience of upstream unit PHE in the exploration](https://www.financedigest.com/revolutionising-finance-exploring-the-impact-of-omnichannel-insurance-on-customer-experience.html "Revolutionising Finance: Exploring the Impact of Omnichannel Insurance on Customer Experience"), development and production of gas fields, including its operation of the Badak LNG plant. Petronas [group CEO](https://www.financedigest.com/man-group-picks-all-female-top-team-as-ceo-ellis-retires.html "Man Group picks all-female top team as CEO Ellis retires") Tan Sri Tengku Muhammad Taufik said the deal marked an significant milestone for its portfolio expansion in Indonesia. Our participation underscores the commitment in supporting Indonesia’s production target to achieve one [million barrels of oil](https://www.financedigest.com/russias-sberbank-sues-glencore-for-116-million-over-oil-supplies.html "Russia’s Sberbank sues Glencore for 6 million over oil supplies") per day and 12 billion standard cubic feet per day of gas by 2030,” he said. [Indonesia’s oil](https://www.financedigest.com/u-s-sanctioned-oil-tanker-stuck-in-indonesia-carries-venezuelan-fuel.html "U.S.-sanctioned oil tanker stuck in Indonesia carries Venezuelan fuel") and gas production has declined in recent years as reserves are depleting, and as some major new projects, such as Masela and Indonesia Deepwater Development (IDD), are facing delays as majors such as Shell and Chevron Corp exit projects to reflect changes to their global strategy. Indonesia still has a huge potential of natural gas source, so we are in the race to explore, exploit, to make it as a big bridge to support our energy transition,” Indonesian Energy [Minister](https://www.financedigest.com/exclusive-norway-eyes-high-gas-output-until-2030-says-energy-minister.html "Exclusive-Norway eyes high gas output until 2030, says energy minister") Arifin Tasrif said in his opening remarks at the conference. Nicke said Pertamina aims for the final investment decision (FID) to be concluded in 2026, but said authorities wanted the timeline to be moved ahead. SKK Migas chief Dwi Soetjipto told Reuters on the sidelines that the revised development plan for the Masela block is expected to be approved in the second half, and targeted the FID to be [reached by the end](https://www.financedigest.com/automotive-hardware-market-is-projected-to-reach-a-market-value-in-excess-of-us-100-bn-by-2029-end.html "Automotive Hardware Market is projected to reach a market value in excess of US$ 100 Bn by 2029 end") of 2024. Arifin told Reuters last month that Petronas and Pertamina had [planned to take over Shell’s Masela stake](https://www.financedigest.com/german-space-firm-ohb-plans-to-delist-as-kkr-takes-minority-stake.html "German space firm OHB plans to delist as KKR takes minority stake"). (Reporting by Fransiska Nangoy, Bernadette Christina Munthe; Writing by Florence Tan; Editing by Muralikumar Anantharaman, Christian Schmollinger and Kim Coghill) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---