Eni has agreed to offload a stake of 20% in the East Sepinggan area and 30% stake in the East Ganal production sharing contract (PSC), both located offshore Indonesia to Neptune Energy for an undisclosed price.
The Italian oil and gas company, which is undertaking the deal through its subsidiary Eni East Sepinggan, will continue to be the operator of the East Sepinggan area located off the coast of East Kalimantan. The area includes Merakes development and the Merakes East gas discovery announced in December 2018.
The East Ganal PSC is located in the Kutei Basin offshore East Kalimantan. Eni was awarded the deepwater exploration block in May 2018.
Eni and Neptune Energy are already partners in the Kutei Basin
Eni and Neptune Energy have been partners in the Muara Bakau area, which contains the Jangkrik deepwater field in the Kutei Basin that has been in production since May 2017. Eni is the joint venture operator with a stake of 55%, while Neptune Energy has a 33.3% stake.
According to Neptune Energy, the East Sepinggan area provides the fast-tracked, low-cost Merakes development that is likely to be cash flow positive shortly after it is brought into production. The Merakes field is being developed as a subsea tie-back to the Jangkrik facility.
The Merakes East discovery is expected to provide additional contingent resources that can be developed in the near term. On the other hand, the East Ganal PSC offers longer-term exploration prospects in the Kutei basin, said the UK-based oil and gas company.
Neptune Energy CEO Jim House said: “This is a strategically important agreement for Neptune, strengthening our position in Indonesia and providing both near and long-term growth.
“We look forward to deepening our strong relationship with Eni as our partner of choice in the greater area”.
For Eni, the transaction is part of its dual exploration model, which calls for early monetisation of exploration successes for optimising the supply chain while cutting down costs.
The closing of the deal, which will be subject to the customary regulatory approvals, is anticipated to be completed in the fourth quarter of this year.