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MedcoEnergi to acquire ConocoPhillips' Indonesian assets
Indonesia’s second-largest oil and gas company is set to pay $1.36 billion for the assets of US-controlled energy firm ConocoPhillips Indonesia Holding.
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T Medco Energi Internasional, Indonesia’s second-largest oil and gas company, has clinched a deal with ConocoPhillips to acquire the assets of ConocoPhillips Indonesia Holding Ltd (CIHL).
MedcoEnergi is set to acquire CIHL’s entire issued share capital from Phillips International Investment Inc., a subsidiary of US-based ConocoPhillips.
The acquisition is expected to be concluded in the first quarter of 2022, subject to customary conditions and shareholders’ approval at the extraordinary general shareholders meeting (RUPSLB), MedcoEnergi CEO Roberto Lorato said.
“The acquisition further strengthens MedcoEnergi’s footprint in Southeast Asia and will generate significant synergies with our Sumatra operations. We look forward to welcoming Corridor’s high-quality workforce into MedcoEnergi group,” Lorato said in a statement issued on Wednesday.
Read also: Shell plans to exit gas-rich Masela Block project
CIHL holds a 100 percent interest in ConocoPhillips (Grissik) Ltd. and a 35 percent interest in Mauritius-based pipeline enterprise Transasia Pipeline Company Pvt. Ltd.
ConocoPhillips (Grissik) Ltd., also a subsidiary of ConocoPhillips, is one of the operators of the production sharing contract (PSC) Corridor Block in South Sumatra with a 54 percent working interest.
Other partners in the gas-rich Corridor Block are Repsol’s Talisman Corridor Ltd. and Pertamina upstream oil sector arm Pertamina Hulu Energi Corridor.
The Corridor Block has two producing oil fields and seven producing gas fields located onshore in South Sumatra, according to the statement. The majority of production is gas sold under long-term contracts to Indonesian and Singaporean counterparties.
Read also: Pertamina officially takes over Rokan oil, gas block from Chevron
“The acquisition of Corridor strengthens MedcoEnergi’s position as Indonesia’s leading independent energy and natural resources company and reaffirms our commitment to national development,” said MedcoEnergi president director Hilmi Panigoro.
Medco will own a minority interest from Transasia in the gas pipeline network supplying customers in Central Sumatra, Batam and Singapore. With the acquisition, Medco aims to produce 155,000 barrels of oil per day (boepd) with capital expenditure of $275 million and unit cash costs below $10 per barrel oil equivalent (boe).
"We are proud of our nearly 50-year history in Indonesia and pleased that MedcoEnergi recognizes the value of this business," ConocoPhillips CEO Ryan Lance said in a separate statement. He added that ConocoPhillips would proceed from the sale of its Indonesian assets toward an additional shareholding interest in gas producer and exporter joint venture Australia Pacific LNG, which supplies liquefied natural gas to long-term buyers in China and Japan.
