ConocoPhillips has signed an agreement to divest its interests in Indonesia to the local oil and gas company MedcoEnergi for $1.355bn, a move that will mark its exit from the country.

The US-based company said that it will sell its subsidiary that holds a 35% shareholding interest in the Transasia pipeline company and indirectly owns a 54% interest in the Indonesia corridor block production sharing contract (PSC).

According to a Reuters report, the Indonesia corridor block PSC has seven gas fields and two oil fields.

ConocoPhillips is also exercising its preemption right to buy an additional 10% shareholding interest in Australia Pacific LNG (APLNG) from Origin Energy. The company will purchase the additional stake through its Australian subsidiary for up to $1.645bn.

The ConocoPhillips subsidiary currently owns a 37.5% shareholding stake in APLNG and is expected to increase its ownership to 47.5% upon closing.

ConocoPhillips’ full-year 2020 production from APLNG was approximately 115,000 barrels of oil equivalent per day. In the same period, its assets in Indonesia produced 50,000 barrels of oil equivalent per day.

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By GlobalData

The Indonesia deal is scheduled to close during the start of 2022, subject to customary adjustments. The APLNG transaction also requires approval from the Australian government and is expected to be completed in the first quarter of the same year.

ConocoPhillips chairman and CEO Ryan Lance said: “The Asia Pacific region plays an important role in our diversification advantage as an independent E&P and these two transactions enhance that advantage by lowering our aggregate decline rate and diversifying our product mix.

“We are proud of our nearly 50-year history in Indonesia and pleased that MedcoEnergi recognises the value of this business.

“We are also pleased to have the opportunity to effectively deploy the proceeds from the sale of our Indonesia assets toward additional shareholding interest in APLNG, which supplies LNG to long-term buyers in both China and Japan and is currently the largest supplier of natural gas to Australia’s East coast domestic market, meeting over 30% of its total demand.”

The two transactions come a week after ConocoPhillips acquired Permian assets in the US from Shell Enterprises for $9.5bn.