Hibiscus Petroleum gets nod to buy Shell's stake in PSC for Sabah block

PETALING JAYA: Hibiscus Petroleum Bhd has received approval from Petroliam Nasional Bhd (Petronas) and Petronas Carigali Sdn Bhd to acquire Sabah Shell Petroleum Co Ltd and Shell Sabah Selatan Sdn Bhd’s entire 50% stake in the 2011 North Sabah Enhanced Oil Recovery Production Sharing Contract (PSC).

The deal was struck in October 2016 for a sum of US$25 million (excluding post completion adjustments and reimbursements to Shell).

This means that Shell’s operatorship of four producing oil fields offshore Sabah and the Labuan Crude Oil Terminal will be transferred to Hibiscus’ direct wholly owned subsidiary, SEA Hibiscus Sdn Bhd.

In a stock exchange filing yesterday, Hibiscus announced that Petronas Carigali has waived its pre-emption rights under the joint operating agreement entered between Petronas Carigali and Shell.

Additionally, Petronas has provided its approval to Shell for the assignment of the interest in the PSC in favour of SEA Hibiscus.

The approval from Petronas is subject to certain conditions, which are currently being reviewed by the sellers in conjunction with SEA Hibiscus.

Hibiscus said if further clarifications are required from Petronas in respect of these conditions, these will be sought in due course and the company will make further announcements, if appropriate.

“The company views these as positive developments. Subject to the clarifications and subsequent closure of the conditions, the board of directors of Hibiscus Petroleum expects the proposed acquisition to be completed by the second half of 2017,” Hibiscus said.

Trading in Hibiscus shares has been suspended since last Friday. It will resume today,
In October last year, SEA Hibiscus entered into a conditional sale and purchase agreement with Shell to acquire the latter’s entire stake in the PSC for RM104.63 million.