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OIL AND GAS - JAKARTA. MedcoEnergi has agreed to buy large stakes in two South Sumatra oil and gas blocks from Spain's Repsol for about $90 million, the Indonesian company said on Tuesday.
The oil and gas explorer said it would acquire a 45% participating interest in the Sakakemang block and an 80% interest in South Sakakemang, taking over the operator role for both, subject to Indonesian government approval.
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Repsol said in 2019 that Sakakemang had 2 trillion cubic feet of recoverable gas, going by preliminary estimates, and its development plan had been approved by the government. South Sakakemang is still in the exploration stage.
"The acquisitions, valued at approximately $90 million, strengthen the company's strategic position in South Sumatra and our role in the integrated gas value chain in Java," said MedcoEnergi Chief Executive Roberto Lorato.
Sakakemang block is located near Corridor gas block, where Medco took over operations from Repsol earlier this year.
In an email, a Repsol spokesperson said the transaction aligns with the company's global asset rotation strategy as it focuses on activities in core geographic areas where it has competitive advantages.
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Repsol will maintain its presence in Indonesia through its lubricant business.
MedcoEnergi has also increased its stake in gas pipeline company PT Transportasi Gas Indonesia to 40%, its statement said. The pipeline operator supplies gas from the Corridor block to Riau, Batam and Singapore.
