Eni takes over Chevron's stake in Indonesia deepwater gas project

(Reuters) - Eni signed a deal on Tuesday to take over U.S. oil giant Chevron's stake in the Indonesia Deepwater Development (IDD) gas project, bolstering the Italian company's position in the southeast Asian oil and gas producer.

Chevron said it agreed to sell the shares of its subsidiaries Chevron Makassar Ltd, Chevron Ganal Ltd and Chevron Rapak Ltd, operators of the IDD project, to Eni Lasmo PLC.

Indonesia's energy minister Arifin Tasrif said the deal would "ensure Indonesia's energy security for the next 10 years", and that he expects Eni to continue the second phase of IDD's development.

"Operatorship transfer of IDD from Chevron to Eni is crucial for Indonesia," Arifin said via a virtual broadcast from Jakarta, noting that the IDD project was expected to lift Indonesia's gas production to 12 billion standard cubic feet per day by 2030. Indonesia currently produces around 5 billion cubic feet per day.

Eni and Chevron did not provide a value for the stake sale.

Chevron had announced in early 2020 its intention to exit its 62% stake in the IDD project as it makes changes to its global portfolio.

"The acquisition of Chevron's assets in Indonesia will allow Eni to fast track the development of the IDD project, leveraging its strong presence in the East Kalimantan area as well as the synergies with Eni-operated Jangkrik infrastructure, the existing Bontang LNG facility, and the domestic gas market," Eni said in a statement.

Dwi Soetjipto, the head of Indonesia's upstream oil and gas regulator SKK Migas, told Reuters earlier on Tuesday that the development of the IDD project will be adjusted to integrate the nearby Jangkrik and North Ganal blocks operated by Eni in the Kutai basin.

Eni is already a partner in the IDD project, along with Indonesia's state energy firm Pertamina and China's Sinopec. Located in the Makassar Strait, the project involves the Bangka, Gendalo and Gehem gas fields.

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