Italy’s oil and gas giant Eni SpA (E - Analyst Report) was awarded a 100% participating interest in the East Sepinggan block at the first Indonesian International Bid Round in 2012.
Located around 170 kilometers southeast of the Bontang LNG processing facility, in offshore East Kalimantan, the block spreads over an area of 2,913 square kilometers in the Kutei Basin. The Kutei Basin is a hydrocarbon rich region wherein numerous giant discoveries are currently in production.
Per the plan, Eni is required to complete the full 3D seismic appraisal of the area and drilling of at least one well within the next three years.
Eni is engaged in constant efforts to expand its exploration activities in the rapidly growing Far East oil and gas market. The latest award follows Eni’s signing of contracts for the North Ganal PSC (Kutei Basin) and Arguni I PSC (Bintuni Basin, West Papua) in Indonesia in November last year.
Additionally, the company plans to make the most of the newly planned production hub with the ongoing development of the Jangkrik deep offshore gas field along with the evaluation of the Jangkrik NE discovery.
Eni’s presence in Indonesia dates back to 2001. The company has built a huge assets portfolio in the country, which is key to maintaining the group’s overall output growth. Eni holds working interests in 12 permits and retains operatorship of 8 among them.
Eni’s offshore operations are situated in the Tarakan and Kutei Basins, offshore Kalimantan, north of Sumatra, West Timor and West Papua. In the Kutei Basin, Eni is also trying to develop the large gas reserves located in the Ganal and Rapak blocks.
In the course of the international bid round, 19 blocks were offered of which 14 were presented directly and 5 were handed through regular tenders.
Eni holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain a Neutral recommendation on the stock. Eni faces competition from Statoil ASA (STO - Analyst Report).