Lundin Petroleum to offload Indonesian oil and gas assets

Swedish company Lundin Petroleum has signed a sale and purchase agreement (SPA) to sell its Indonesian oil and gas assets to Medco Energi Internasional.

The assets include the non-operated interest in the producing Singa gas field and the operated interests in the South Sokang and Cendrawasih VII blocks.

The $22m deal also includes the joint study agreement (JSA) in respect of the Cendrawasih VIII block.

Lundin said that the transaction will entitle the company certain contingent payments as well as give an option to receive a future interest in the Cendrawasih blocks.

Medco operates the Singa gas field, in which Lundin holds a 25.8% participating interest.

Lundin Petroleum president and CEO Alex Schneiter said: "We are pleased with the sale of our assets in Indonesia, with net reserves of 0.9 million barrels of oil equivalents.

"We remain committed to our growth strategy in South East Asia where Malaysia continues to be one of Lundin Petroleum’s core areas."

Lundin also owns a 100% participating interest in the Cendrawasih VII block, a 100% interest in the Cendrawasih VIII block in addition to a 60% interest in the South Sokang block.

MedcoEnergi president director and CEO Lukman Mahfoedz said: "This acquisition is in line with the Company’s goal to maximise production of Singa gas field in Lematang Block and it will contribute to MedcoEnergi’s total gas production by 42 MMSCFD in 2015.

"We are expecting the government endorsement for this transaction would be given within a short time since MedcoEnergi is the operator of this block."

Completion of the transaction is subject to various conditions, including the Government of Indonesia approval.