Eni has struck a deal buying assets in Indonesia’s Kutei Basin from Chevron for an undisclosed price.
The Italian company will acquire a 62% stake in the Ganal production-sharing contract (PSC), 62% in Ranak and 72% in Makassar Straits. Eni already has a 20% stake in the Ganal and Rapak blocks.
Acquiring these assets is an “important step”, it said, in accelerating the development of the Gendalo and Gandang gas project. This is part of the Indonesia Deepwater Development (IDD) in the Ganal PSC, close to the Jangkrik FPU. It has estimated natural gas reserves of approximately 2 trillion cubic feet.
Eni also mentioned the producing Bangka gas field, with the Gehem and Ranggas discoveries. There is “significant exploration potential” in the northern part of the asset.
Chevron said in 2020 the IDD “does not compete in its portfolio and is evaluating strategic alternatives” for its stakes.
“The first stage of the IDD Project, Bangka, safely started up in August 2016 and has made a significant contribution to Indonesia’s energy targets,” a spokesperson said. “We are proud of the contribution that Chevron’s talented employees have made to the energy industry in Indonesia through their work on IDD.”
The US company said the Gendalo-Gehem plan included two separate hubs, each with its own FPU. Gas from the project would go to domestic demand and for LNG export. It would produce 1.1 billion cubic feet per day of gas and 47,000 bpd of condensate.
The deal also aligns with Eni’s energy transition plans, with gas and LNG playing a key role. It intends to increase gas production to 60% of its total by 2030.
The Chevron representative said the company was continuing to invest in Indonesia, albeit with a focus on partnerships to develop lower carbon energy solutions.
The company reached a deal in November 2022 with Pertamina and Keppel Infrastructure on exploring green hydrogen and ammonia. In March and June this year it struck more agreements with Pertamina, focused on carbon capture and geothermal energy respectively.
“In July 2023, we announced a further agreement with Pertamina Geothermal Energy to develop potential geothermal resources along with a green hydrogen project in South Sumatra.”
Eni struck a deal to buy Neptune Energy in June, for $2.6 billion. Neptune also has stakes in licences in the area.
CEO Claudio Descalzi, commenting last month on the Neptune deal, said the purchase would deepen “Eni’s presence in offshore Indonesia, supplying the Bontang LNG plant and domestic markets”.
Eni is producing around 80,000 barrels of oil equivalent per day in Indonesia currently.
Indonesia accounted for 0.1% of Chevron’s production in 2022. It lost the Rokan block in August 2021, which had contributed 130,000 bpd the previous year. In 2022, the Kutei Basin assets generated 3,000 boepd to Chevron.
Updated at 12:05 to reference Chevron’s low carbon ambitions in Indonesia and changes headline.