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il and gas company PT Medco Energi Internasional, through its subsidiary PT Medco E&P Malaka, announced Monday it had sealed a deal to acquire Japan Petroleum Exploration Co. Ltd.’s entire 16.67 percent stake in the Block A gas field in Aceh.

Once the transfer of the participating interests has been agreed upon by the central government and regional administration, Medco Energi’s operating interest in the gas field will increase to 58.34 percent.

“The acquisition proves that Medco Energi’s business position is strong in the country, as is its commitment to develop and monetize the oil and gas resources at Block A as part of our support of the government’s plan to develop Aceh’s infrastructure,” Medco Energi CEO Roberto Lorato said Monday.

Currently, Medco Energi owns 41.67 percent of the block, while the remaining 41.66 percent and 16.67 percent belong to KrisEnergy and Japex, respectively. The firm did not disclose the acquisition price.

Medco Energi recently signed an engineering procurement and construction contract worth US$240 million to develop the first phase of the Block A gas field, with a consortium comprising PT JGC Indonesia and PT Encona Inti Industri. The gas field is scheduled to be onstream in the first quarter of 2018.

Furthermore, Medco Energi will supply state-owned oil and gas giant Pertamina with 58 billion British thermal units (BTU) per day — approximately 198 trillion BTU over 13 years.

Meanwhile, Japex president director Osamu Watanabe said the company had decided to divest from the block in an effort to optimize its comprehensive portfolio.

“[However], we remain committed to progressing our projects in Indonesia, such as Kangean,” he said in a written statement, referring to a gas block in East Java.

Watanabe gave his assurances that the transfer would not affect the results of the company’s financial performance from April 2015 to March this year, and it would follow up the transfer with an assessment of the financial performance from April to March next year.

Despite being historically seen as a resource-rich province, Aceh has seen decreasing exploration and production in recent years, partly because of low oil prices that have led oil and gas companies to halt exploration activities to find new hydrocarbon reserves.

Benchmark West Texas Intermediate (WTI) set crude prices at $45.62 per barrel on Monday afternoon, according to figures from Bloomberg. Fellow benchmark Brent Crude set its price at $46.92 per barrel during the same period.

Last year, US-based ExxonMobil also released its 100 percent stake in North Sumatra Offshore (BSO) and 100 percent stake in Aceh’s Block B.

The blocks used to be the main sources of gas for conversion into liquified natural gas (LNG) by Arun’s plant. However, as their reserves have been depleted, the leftover gas is now being channeled to customers via pipeline instead of being converted into LNG.

The government recently took the first steps toward establishing a regional oil and gas regulator dedicated to Aceh (BPMA), inaugurating former PT PGN LNG Indonesia commercial and LNG shipping vice president, Marzuki Daham, as its head.

Marzuki said last month that once the BPMA had been officially established within the next six months, it would concentrate on increasing exploration investment as the reserves at the oil and gas fields currently being operated were depleting fast.