Italy's Eni said on Monday it has agreed to two deals with Indonesia's Medco Energi and state firm Pertamina, for the sale of stakes in upstream assets in Indonesia in a move that strengthens the Southeast Asian nation's control over gas resources.
Under the terms of the deals, the Italian oil and gas company would sell a 10 per cent interest in the East Sepinggan, North Ganal and Rapak blocks to Pertamina Hulu Energi, an upstream unit of state firm Pertamina, with the transactions increasing Pertamina's participating interest to 25 per cent in East Sepinggan.
"These assets include the producing Merakes and East Merakes gas fields, as well as Geng North–Gehem gas discoveries, which are currently being developed through the North Hub gas project, designated as a National Strategic Project," Eni said.
Pertamina said the acquisition will strengthen the country's energy security while optimising the company's assets in the region.
"Pertamina’s participation in these assets can directly support and advance the Kutei North Hub Project, a national strategic project connected to Pertamina’s existing infrastructure," Pertamina spokesperson Hermansyah Nasroen said.
Eni would also sell to Medco Energi a 10 per cent participating interest in four oil and gas blocks in the Kutai Basin, East Kalimantan, including Muara Bakau, Ganal, West Ganal, and East Ganal currently operated by Searah, a joint venture energy company formed by Eni and Malaysia's Petronas, Medco said in a separate statement.
The assets Medco acquired included the producing Jangkrik field, the Maha, Gendalo and Gandang gas projects being executed as part of the South Hub project, and the recently announced Geliga giant gas discovery, which is estimated to have five trillion cubic feet of gas and 300 million barrels of condensate.
"This transaction complements our existing Indonesian portfolio and expands our presence into an established LNG value chain," said Ronald Gunawan, Medco Energi's CEO.
Andrew Harwood, research director for global energy intelligence group Wood Mackenzie, said increased Indonesian involvement will align all stakeholders in the efficient and timely development of a resource that will support the outlook for the Bontang LNG plant and strengthen domestic energy security.
"For Pertamina, the assets acquired are weighted towards near-term development potential, while Medco is adding production and longer-term exploration upside. Both are adding deepwater exposure, having built their portfolios on conventional onshore and shallow water developments," he added in a post on social media.
(Reporting by Bernadette Christina and Ananda Teresia; Editing by Tom Hogue and Louise Heavens)