ConocoPhillips sells stake in Indonesian block

OREANDA-NEWS. September 21, 2016. ConocoPhillips is selling its stake in a gas block in Indonesia as part of an ongoing plan to shed non-core assets.

The world's biggest independent is selling its 40pc stake in the South Natuna Sea Block B to Indonesian producer MedcoEnergi. ConocoPhillips is the operator of the block, with US major Chevron holding 25pc and Japan Inpex's owning the remaining 35pc.

ConocoPhillips did not share details of the deal, but said it would include the associated transportation system and onshore receiving terminal. The deal is expected to close later this year.

The block, which started production in 1979, has a current output of about 23,000 b/d of oil equivalent (boe/d). Gas output from the area was 89mn cf/d.

ConocoPhillips has four production sharing contracts (PSCs) in Indonesia. The Block B aside, the remaining three are onshore blocks, of which two are in South Sumatra and one in central Kalimantan. Operations are expected to continue in the remaining areas.

Like most other oil companies, ConocoPhillips is focusing on strengthening its balance sheet, with a target to reduce total debt to under \\$25bn. The company has made progress in recent months, cutting debt to \\$28.7bn at the end of the second quarter from \\$29.5bn at the end of the first quarter. It generated over \\$200mn in divestment proceeds in the second quarter and it plans to complete about \\$1bn of asset sales by the end of this year.