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 (Neptune Energy), signed an agreement for the sale of a 20 percent participating interest out of Eni’s share in the East Sepinggan area, offshore East Kalimantan, Indonesia to Neptune Energy, the companies have announced on Friday (07/26).

Eni will continue to be the Operator of the area and includes Merakes development and Merakes East discovery. The agreement is subject to the necessary authorizations from Indonesia’s authorities, the company said in a press release.

Eni and Neptune Energy are already partners in the Muara Bakau area, which includes the Jangkrik field, located in the Kutei Basin, offshore East Kalimantan in Indonesia, where Eni is the joint venture Operator with 55 percent participating interest share.

The Merakes development project, included in the East Sepinggan area, consists in 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 gas production will be shipped to the Bontang LNG plant using also all the other existing facilities of Jangkrik field as well as the East Kalimantan transportation network. This new production will also contribute to the life extension of the plant.

The sale, once completed, will contribute to aligning existing projects synergic with the development of Jangkrik, making use of its existing facilities in order to maximize value to both JV partners and the government of Indonesia.

This agreement is part of Eni’s unique “dual exploration model” consisting in the early monetization of exploration successes in order to optimize the supply chain while reducing costs. Eni announced the FID for Merakes development and the discovery of Merakes East in December 2018 and Friday’s agreement confirms Eni’s success in attracting third parties’ investments in its high-quality projects and exploration discoveries.

Eni has been operating in Indonesia since 2001 and currently has a large portfolio of assets in exploration, production, and development. Eni is the operator of East Sepinggan Contract Area through its subsidiary Eni East Sepinggan Limited which holds an 85 percent Participating Interest while PT Pertamina Hulu Energi East Sepinggan holds the remaining 15 percent.

Production activities are located in the Kutei Basin, East Kalimantan, mainly through the Jangkrik field, in the Muara Bakau working area, that delivers products in excess of 650 mmscfd.

On the same occasion, the Rome headquartered firm reported a second-quarter profit that missed analysts’ estimates, though production held steady and output-growth targets were confirmed.

Adjusted net income dropped 27 percent from a year earlier to €562 million (US$626.5 million), falling well short of the €935.2 million average estimates of analysts. Production slipped just 2 percent.

Net cash from operations rose 49 percent from a year earlier to €4.52 billion. That in part reflects an additional dividend paid by Var Energi, the Norwegian oil company majority-owned by Eni.

Production slid to 1.83 MMboed from 1.86 MMboed a year earlier, following a shutdown at the giant Kashagan field in Kazakhstan and maintenance in Norway. The company confirmed its 2019 target for output growth of 2 percent to 2.5 percent.

1€=$1.1118

Written by Lexy Nantu, Email: lexy@theinsiderstories.com