ConocoPhillips sells Indonesia assets as part of an Asia-Pacific reorganisation

[ASEAN NOW Content Team]

 

ConocoPhillips, the world's largest oil and gas corporation, is exiting Indonesia, selling its assets for $1.355 billion to Indonesian energy business Medco Energi Internasional, and beefing up in Australia as the country continues to transform.

ConocoPhillips' move to double down on U.S. shale with a $9.5 billion purchase of Royal Dutch Shell's West Texas properties and a $13.3 billion deal for Concho Resources, as well as its exit from Canada's oil sands, U.S. offshore, and British North Sea fields, follows its exit from Canada's oil sands, U.S. offshore, and British North Sea fields.

 

The largest independent oil producer in the United States announced on Wednesday that it would sell a subsidiary that owns a 54 percent stake in the Indonesia Corridor Block Production Sharing Contract (PSC), which includes two oil fields and seven gas fields, as well as a 35 percent stake in Transasia Pipeline Company.

ConocoPhillips also announced that it was exercising its right to buy up to a 10% share in Australia Pacific LNG (APLNG) from Origin Energy for up to $1.645 billion, beating out an offer from private equity firm EIG Partners.

 

ConocoPhillips CEO Ryan Lance stated in a statement, "The Asia Pacific area plays a vital part in our diversification advantage as an independent E&P, and these two deals improve that advantage by lowering our aggregate decline rate and diversifying our product mix."

ConocoPhillips' subsidiary now owns 37.5 percent of APLNG and might own up to 47.5 percent once the transaction closes in the first quarter of 2022.

 

Sinopec, the other APLNG partner, still has the option to match the offer for a portion of the 10% stake Origin is selling by December 17, according to Origin.

The full-year 2020 production from APLNG for ConocoPhillips was around 115,000 barrels of oil equivalent per day (boepd).
In comparison, the assets it is selling in Indonesia generated around 50,000 boepd.

ConocoPhillips is continuing its "proactive A&D (acquisitions and divestitures) strategy to streamline and high grade its worldwide portfolio," according to RBC Capital Markets analyst Scott Hanold.

He went on to say that while the update is slightly favourable for the company, it is a rather neutral event for the stock.