Following last week’s report that Indonesian energy firm was on the verge of buying ConocoPhillips’ stake in the South Natuna Sea Block B offshore Indonesia, the deal has now been officially confirmed.
Medco will acquire ConocoPhillips Indonesia Inc. Ltd. and ConocoPhillips Singapore Operations Pte. Ltd., both subsidiaries of ConocoPhillips.
ConocoPhillips Indonesia is the operator of the South Natuna Sea Block B PSC with a 40% working interest and is the operator of the West Natuna Transportation System. ConocoPhillips’ operated South Natuna Sea Block B has three producing oil fields and 16 natural gas fields in various stages of development.
ConocoPhillips Singapore Operations operates the Onshore Receiving Facility in Singapore.
Medco said that the the West Natuna Transportation System 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. The transaction is expected to complete in fourth quarter 2016.
Roberto Lorato, Medco CEO, said that: “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.
“Above all, we acknowledge South Natuna Sea Block B’s world class operating scale and infrastructure, its highly experienced and proven operating team and best-in-class health, safety, and environmental record. We look forward to integrating the asset into MedcoEnergi’s upstream portfolio.”
ConocoPhillips has been working on asset sales, primarily deepwater fields in the U.S. Gulf of Mexico, but it also mentioned Indonesia in one of its previous quarterly reports.
The company is working to achieve a goal of $1 billion of proceeds from asset sales in 2016, aiming to use the obtained cash to service debt.
ConocoPhillips’ CEO Ryan Lance has previously said the company’s aim is to reduce debt as it matures, adding that debt payment could be accelerated as assets sales progress.
Offshore Energy Today Staff