Japanese E&P company Inpex Corporation has decided to sell all shares in its subsidiary Inpex Nantuna Ltd. to PT Medco Daya Sentosa, a subsidiary of PT Medco Energi Internasional Tbk., a listed Indonesian energy company.
According to Inpex’s statement on Monday, Inpex Natuna holds a 35% participating interest in South Natuna Sea Block B off Indonesia.
Inpex’s exit from the Natuna Sea block follows last year’s exit by the oil major ConocoPhillips. Namely, Conoco, which had 40% interest in the block and was the operator, also sold its interest to Medco.
Following its acquisition of a participating interest in the block in 1977, Inpex began producing crude oil in 1979 and natural gas in 2001. Thereafter, crude oil, natural gas and liquid petroleum gas (LPG) development and production activities took place at multiple oil and gas fields in the block.
Inpex explained that, after almost 40 years since the start of oil production, the contribution of Inpex Natuna in terms of income and cash flow is expected to become relatively limited, therefore the company has decided to sell it to optimize its global asset portfolio.
South Natuna Sea Block B is located 1,200km north of Jakarta, Indonesia in the Natuna Sea where the water depth is approximately 50 to 55 meters deep.
The average production rate for the Block for the year 2016 was approximately 20,000bbl/d of crude oil, 197MMscf/d of natural sales gas and 6,000bbl/d of LPG.
The block’s participating interest ratio prior to the sales of all shares is as follows: Inpex 35%, Medco E&P Natuna 40% (operator) and Chevron 25%.