PT Medco Energi Internasional has agreed to acquire two subsidiaries of ConocoPhillips, seeing it take over the South Natuna Sea Block B production sharing contract, offshore Indonesia, with a 40% working interest.
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Image from ConocoPhillips. |
PT Medco will also become operator of the West Natuna Transportation System (WNTS) and take over an onshore receiving facility in Singapore.
"The WNTS infrastructure together with the Malaysian pipeline is, and will continue to be the focal point for the commercialization of existing discoveries and ongoing exploration activities within the Natuna area," PT Medco said.
The deal is expected to complete in Q4 2016.
Roberto Lorato, CEO, said: “Once effective, this acquisition will add substantial gas and liquids reserves and increase MedcoEnergi’s daily production by over 35%. With solid cash flows despite the current low oil price, the transaction is immediately accretive.”
Other partners in the Natuna PSC include Chevron (25%) and INPEX (35%). Net daily production from the block during 2015 averaged 5000 bbl of liquids and 66 MMcf of natural gas, according to Chevron.
This acquisition comes after Medco Energi entered into an agreement with privately-owned Singaporean company Hyoil earlier this month to sell 100% interest in the Bawean PSC. An offshore oil producing asset located off the coast of East Java, production from Bawean was approximately 670 bo/d in 1H 2016.
Medco Energi has operated the Bawean PSC since 2004, which is set to expire in 2031 following the 20-year contract extension granted by the government of Indonesia in 2010.
Lorato CEO said this divestment is aligned with the company’s plans to rationalize portfolio in order to focus on higher growth assets. He said the divestment will create value for both Medco Energi and HyOil shareholders.
Similarly, in July, ConocoPhillips entered into an agreement with Australia’s Woodside Energy to sell its 35% interest in three exploration blocks offshore Senegal. The blocks, Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore have a net carrying value of approximately US$250 million.
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