Santos is set to divest its non-core assets in Asia to British oil and gas exploration and production company Ophir Energy for $221m.
The move is in line with Santos’ strategy to realise value from its late-life non-core assets.
As a result of the transaction, the company will exit from businesses in Vietnam, Indonesia, Malaysia and Bangladesh.
The proposed asset sale includes 31.875% in the Block 12W production sharing contract (PSC) (Chim Sáo and Dua oil fields) in Vietnam; 67.5% in the Madura Offshore PSC (Maleo and Peluang gas fields) in Indonesia; 45% in the Sampang PSC (Oyong and Wortel gas fields) in Indonesia.
In addition, Ophir will acquire 20% in the Deepwater Block R PSC (Bestari oil discovery), Malaysia; 45% in the SS-11 PSC, Bangladesh; and 50% in Block 123 PSC and 40% in Block 124 PSC, Vietnam.
Santos managing director and CEO Kevin Gallagher said: “The sale of the Asian assets further delivers on our undertaking to simplify our business and focus on our five core long-life natural gas assets in Australia and Papua New Guinea.”
“We have always believed the Asian assets are a quality portfolio and are pleased to achieve an attractive outcome for our shareholders.
“Santos will work with Ophir to ensure a smooth transition, including the transfer of all the Santos employees to Ophir.”
The company intends to use the proceeds of the transaction to further reduce its debt, which amounted to $2.5bn at the end of March this year.
The transaction does not include Santos’ 50% interest in the North West Natuna PSC (Ande Ande Lumut) oil development in Indonesia as the company intends to pursue the sale in a separate transaction.
Subject to shareholder approval and other customary consents, the sale is scheduled to be completed in the second half of this year.