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rance-based Total E&P Indonesie says it will sell 10 percent of its stake of an oil and gas field in Papua to publicly listed energy company PT Indika Energy.

The firms inked a deal to jointly develop the oil and gas field through their subsidiaries Total E&P Indonesia West Papua and PT Indika Multi Daya Energi.

Under the deal, Indika will acquire a 10 percent stake in Southwest Bird’s Head production-sharing contract (PSC) from Total. The value of the transaction was not revealed pending approval from Indonesian authorities and completion of due diligence.

“This purchase will further strengthen our energy platform,” Indika president director Arsjad Rasjid said in a statement. “It will leverage Indika Energy’s in-depth understanding of the local market context and create synergies with our activities in Papua.”

Integrated energy company Indika established Indika Multi Daya Energi in December. Indika currently has various investments, including those in coal miners PT Kideco Jaya Agung, PT Santan Batubara, PT Multi Tambangjaya Utama and PT Mitra Energi Agung.

The company also has engineering, procurement and construction (EPC) contracts in the oil and gas sector through Tripatra; EPC mining contracts through Jakarta-listed PT Petrosea; logistics interests through Jakarta-listed coal transport and shipping firm PT Mitrabahtera Segara Sejati, PT Sea Bridge Shipping and PT Cotrans Asia, as well as a power generation company, PT Cirebon Electric Power.

Elisabeth Proust, the Total Group’s representative in Indonesia, said that Total wanted to further expand the company’s scope of business in Indonesia.

“This transaction is the first step in developing wider cooperation between Total and Indika Energy and demonstrates Total’s ability to team up with quality local partners to explore and develop Indonesian oil and gas resources,” Proust, also general manager of Total E&P Indonesia West Papua, said.

Total E&P Indonesie vice president for finance A. Noviyanto said that working with local partners has been Total’s policy.

“In the upstream oil and gas industry, particularly exploration, it’s a common thing to share the risk — and of course, the profits if there is a discovery — and then become commercial,” Noviyanto said.

However, he said that it was easier to start oil and gas projects on its own. “It is simpler to perform it on our own compared to process it after forming a consortium. That’s why we previously have held 100 percent [stakes],” he added, referring to Southwest Bird’s Head PSC.

Total was awarded the Southwest Bird’s Head PSC in August 2011 as part of the Second Round 2010 Regular Tender.

The exploration block is located in the offshore Salawati Basin in West Papua and covers 7,176 square kilometers. The first exploration well at the block is expected to open in April.

The company also has a 50 percent stake and is the operator of the Mahakam PSC in East Kalimantan.

Among its other interests, Total is the operator and holds a 100 percent participating interest in the South East Mahakam, Telen, PSC offshore East Kalimantan and the Bengkulu I-Mentawai PSC offshore West
Sumatra.

Amahl S. Azwar contributes to this story