Eni boosts Indonesia exposure with big gas discovery

2 Oct 2023

The logo of Italian multinational energy company Eni is displayed at their booth during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File photo Acquire Licensing Rights

Discovery - Figure 1
Photo Reuters

MILAN, Oct 2 (Reuters) - Italian energy group Eni announced on Monday a big gas discovery in Indonesia, opening the door to a strengthening of its position in the Asian country, where it has been present since 2001 with a portfolio of exploration and production assets.

The group said the discovery was from the Geng North-1 exploration well drilled in the North Ganal PSC, about 85 kilometres (53 miles) off the coast of East Kalimantan.

Preliminary estimates indicated a total discovered volume of 5 trillion cubic feet (tcf) of gas, equal to about 140 billion cubic metres, with an estimated condensate content up to 400 million barrels.

The ongoing exploration campaign is in line with Eni's (ENI.MI) strategy to shift its portfolio mix towards gas and liquefied natural gas (LNG), targeting 60% in 2030, and to increase its LNG equity portfolio.

Indonesia, and South-East Asia in general, play a role in this strategy, Eni said, adding its current production in the country was 80,000 barrels of oil equivalent per day.

The chairman of Indonesia's upstream oil and gas regulator, SKK Migas, said in a statement that the country hoped Eni's discovery would attract other international oil companies and added the regulator was coordinating with the group so the discovery could be monetised immediately.

The discovery opens the door to the creation of a new production hub to be tied to the Bontang LNG facilities on the coast of East Kalimantan, Eni said.

It is estimated that, in addition to Geng North, more than 5 tcf of gas in place are present in undeveloped discoveries within the area of interest, the Italian group said.

The Geng North discovery is adjacent to the Indonesia Deepwater Development (IDD) area that includes several discoveries for which Eni recently announced the acquisition of Chevron's (CVX.N) interests.

Significant synergies between the two areas are envisaged in terms of gas development options, Eni said.

In addition, the expected completion of Eni's deal to acquire Neptune Energy will allow a further strengthening of Eni's position in the North Ganal area.

Additional reporting by Fransiska Nangoy in Jakarta Editing by Cristina Carlevaro and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

Francesca has covered since 2022 some of Europe's biggest energy groups, focusing on their efforts to decarbonize their business while ensuring growth and technological progress. She also reports about European Union's initiatives against climate change and energy regulation in Italy. She was named Reporter of the Year in 2022 by Reuters. Before energy, Francesca was part of Reuters aerospace and defense reporting team. She is graduated in Economics and loves painting in her free time.

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