JAKARTA (TheInsiderStories) – Italian multinational oil and gas company Eni S.p.A (BIT: ENI) through its subsidiary Eni East Sepinggan Limited and Neptune Energy Group Limited’s unit Neptune Energy East Sepinggan BV, have completed the transfer of a 20 percent participating interest in the East Sepinggan area out of Eni’s share to Neptune Energy Group Limited, the company said on Thursday (12/05).

Eni, which still holds 65 percent participating interest, will continue to be the operator of the East Sepinggan area, offshore East Kalimantan in Indonesia, and includes Merakes development and Merakes East discovery. While, the remaining participating interests will now be owned by PT Pertamina Hulu Energi East Sepinggan and Neptune Energy East Sepinggan BV with 15 percent and 20 percent, respectively.

The company said the transaction will accelerate the monetization of the exploration successes. Currently, Eni has been able to cash in more than US$10 billion from 2013 to 2019. Furthermore, the completion of this transaction strengthens cooperation in Indonesia. Both companies are partners in the Muara Bakau area, which includes the Jangkrik field in the Kutei Basin, offshore East Kalimantan.

Currently, Eni is developing The Merakes development project in the East Sepinggan area. The project consists of the drilling and construction of subsea wells with a dedicated transportation system in 1500m water depth and connected to the Jangkrik Floating Production Unit (FPU), located 35 km North East. The project will produce gas which will be shipped to the Bontang LNG plant using the other existing facilities of the Jangkrik field and East Kalimantan transportation network.

Eni has been operating in Indonesia since 2001 and currently has a large portfolio of assets in exploration, production, and development. Production activities are located in the Kutei Basin, East Kalimantan, and through the Jangkrik field, in the Muara Bakau working area, which delivers more than 600 mmscfd.

Previously, the Indonesian Ministry of Energy and Mineral Resources (EMR) announced state-owned energy producer, PT Pertamina, Eni Indonesia, and Neptune Energy West Ganal BV as the winner of West Ganal block auction. The project has commitment value and a signature bonus of $189.4 million.

“The consortium is able to provide a signature bonus of $30.1 million and a definite commitment of exploration worth $159.3 million. The figure is the highest, beating the Selat Panjang block offering value with a $5 million signature bonus and commitment definitely $74 million,” said EMR Deputy Minister Arcandra Tahar.

The West Ganal block off the Makassar Straits is not a new area because it has been auctioned several times. In fact, the consortium was almost declared as the winner of the block auction in the previous stage. But at that time the government cancelled the determination of the managing contractor.

The value of the signature bonus this time has increased compared to the government requested which is a minimum of $15 million and with a minimum of definite work commitments.

Tahar said that in the second stage of the auction there was four oil and gas block being auctioned with 13 companies accessing data. But in the final decision, the government set only one block that finally had a winner. Although only one block was sold, the quality of the offer from the contractor was better than the previous offer.

Three unsold blocks such as Bone, Kutai and West Kampar, became available work areas. The government will re-evaluate the three work areas to be offered again at the next auction opportunity.

The West Ganal block is estimated to still have a gas content of more than 600 BSCF that will contribute to Pertamina’s oil and gas production in East Kalimantan after Mahakam Block, Sangasanga Block, and East Kalimantan – Attaka Block.

Written by Staff Editor, Email: theinsiderstories@gmail.com