Pertamina, Petronas pick up Shell’s interest in the Abadi project while Eni takes over operatorship and a majority stake in the Gendalo and Gandang projects.
Hart Energy Staff
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Shell Plc and Chevron Corp. are both selling off interests in different blocks offshore Indonesia, the companies announced separately on July 25.
On July 25, Shell subsidiary Shell Upstream Overseas Services Ltd. announced it was selling its 35% interest in the Masela Block production sharing contract (PSC) in 1,900 ft water depth to PT Pertamina Hulu Energi and Petronas Masela Sdn Bhd, while Eni SpA announced on the same day it was snapping up Chevron’s interests in the Ganal, Rapak and Makassar Straits PSCs.
The base consideration for the Shell deal, which includes the $20-billion deepwater Abadi gas project in the west Arafura Sea, Eastern Indonesia, is $325 million cash plus a contingent $325 million to be paid when the Abadi gas project receives final investment decision (FID).
Chevron is selling its Kutei Basin interests to Eni. (Source: Chevron Corp. 2020 supplement to annual report)
The transaction’s effective date is Jan. 1, 2023, and is expected to be complete in third-quarter 2023, subject to standard conditions and regulatory approval by Indonesia’s Ministry of Energy and Mineral Resources.
Zoë Yujnovich, Shell’s integrated gas and upstream director, said in a press release that the sale was in line with the company’s focus on “disciplined capital allocation.”
PT Pertamina’s PT Pertamina Hulu Energi and Petronas subsidiary Petronas Masela jointly bid to take over Shell’s 35% stake, Petronas said in a press release.
Pertamina is acquiring 20% interest while Petronas Masela is acquiring 15% interest in the Masela Block. Both buyers have signed sale and purchase agreements (SPA).
Petronas said a ceremony to mark the signing of the SPA was held during the 47th Indonesian Petroleum Association (IPA) Convention & Exhibition in Indonesia on July 25.
Pertamina CEO Nicke Widyawati said in a press release that the Abadi Field could generate work for as many as 10,000 people.
Petronas President and Group CEO Tan Sri Tengku Muhammad Taufik said in a press release that the acquisition marks a “significant milestone” in the company’s portfolio expansion in Indonesia.
Following Shell’s exit, Inpex continues to operate the PSC with 65% on behalf of new partners Pertamina with 20% and Petronas with 15%.
Eni’s Indonesia expansion
Eni’s acquisition of Chevron’s interests in three Indonesian PSCs in the Kutei Basin offshore East Kalimantan for an undisclosed sum increases the Italian operator’s share in two blocks and follows Eni’s recent agreement to buy Neptune Energy, which has a significant presence in Indonesia.
The deal brings Eni’s interest in the Ganal and Rapak PSCs from 20% to 82%, with Eni becoming operator of the two blocks. Eni also picked up Chevron’s 72% interest in the Makassar Straits PSC. The closing of the transaction is subject to the customary governmental and regulatory approvals.
Eni said the deal makes it possible to fast track the Gendalo and Gandang gas project, which is part of the Indonesia Deepwater Development in the Ganal PSC. This project is near the Eni-operated producing Jangkrik Field.