Conoco wraps up Indonesia exit
ConocoPhillips announced March 2 that it had completed the sale of a 51% stake in the Corridor production-sharing agreement in Indonesia to MedcoEnergi, as well as its 35% interest in the Transasia pipeline company.
The $1.4bn deal takes effect retrospectively from January 1, with ConocoPhillips projected to net $800mn in cash. This also accounts for a $100mn restricted cash amount transferred to MedcoEnergi at closing.
Corridor is situated on the Indonesian island of Sumatra. In 2021, the asset yielded a total of 51,000 barrels/day of oil equivalent, and the project currently contains around 70mn barrels in reserves, down from 85mn in December.
MedcoEnergi's entry comes amid a prolonged period of decline for Indonesia's upstream sector. Both its oil and gas production has been falling for years. The company also operates the 275-MW Riau gas-fired combined cycle power plant on Sumatra's central eastern bank, launched in February. The $290mn project is aimed at strengthening power reliability and reducing greenhouse emissions around central Sumatra.
ConocoPhilips CEO and chairman Ryan Lance said the US major was satisfied with MedcoEnergi's valuation of its assets in Indonesia, where it began operations more than 50 years ago. It comes as the company posted a $2.6bn positive earnings statement for the fourth quarter, recovering from the $800m loss it suffered in the final quarter of 2020. Elsewhere in Asia-Pacific ConocoPhillips is extending its LNG exposure, having increased its stake in Australia Pacific LNG to 47.5% on February 18.
"We are proud of our half-century history in Indonesia and pleased that MedcoEnergi recognises the value of this businesses," Lance said. "This disposition is part of our ongoing effort to focus our investments across low cost of supply opportunities."