Oil and gas company Neptune Energy has agreed to acquire interests from Eni in the Kutei basin Production Sharing Contracts (PSC), offshore Indonesia.
The agreement will see Neptune acquire a 20 percent working interest in the East Sepinggan PSC and a 30 percent working interest in the East Ganal PSC, Neptune said on Friday.
The East Sepinggan PSC offers the fast-tracked, low-cost Merakes development that is expected to be cash flow positive shortly after start-up, Neptune added.
In a separate statement on Friday, Eni said it will continue to be the operator of the area which is located in the East Sepinggan area, offshore East Kalimantan in Indonesia, and includes Merakes development and Merakes East discovery. The agreement is subject to the necessary authorizations from Indonesia’s authorities.
Eni and Neptune Energy are already partners in the Muara Bakau area, which includes the Jangkrik field, located in the Kutei Basin, offshore East Kalimantan in Indonesia, where Eni is the joint venture operator with 55% participating interest share.
The Merakes development project, included in the East Sepinggan area, consists in the drilling and construction of subsea wells with a dedicated transportation system in 1500m water depth and connected to the Jangkrik Floating Production Unit (FPU), located 35 km North East.
The gas production will be shipped to the Bontang LNG plant using also all the other existing facilities of Jangkrik field as well as the East Kalimantan transportation network. This new production will also contribute to the life extension of the plant.
The sale, once completed, will contribute to align existing projects synergic with the development of Jangkrik, making use of its existing facilities in order to maximize value to both JV partners and the government of Indonesia.
Eni announced the FID for Merakes development and the discovery of Merakes East in December 2018.
Neptune added that the East Ganal PSC provides longer-term exploration prospects in the prolific Kutei basin.
Jim House, Neptune CEO, 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.”
The completion of the transaction is expected in the fourth quarter of 2019.
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