ConocoPhillips has announced two transactions intended to core up the important Asia-Pacific segment of its diverse global portfolio.The company announced it has entered into an agreement to sell the subsidiary that indirectly owns the company’s 54% interest in the Indonesia Corridor Block Production Sharing Contract (PSC) and a 35% shareholding interest in the Transasia Pipeline Company.

The sale to MedcoEnergi for $1.355 billion is subject to customary adjustments and is expected to close in early 2022, subject to certain conditions precedent. The Indonesia assets being sold produced approximately 50 thousand barrels of oil equivalent per day (MBOED) for the nine months ended Sept. 30, 2021, and had year-end 2020 proved reserves of approximately 85 million barrels of oil equivalent. The effective date for the transaction will be Jan. 1, 2021.

In addition, through its Australian subsidiary, the company announced that it has notified Origin Energy that it is exercising its preemption right to purchase up to an additional 10% shareholding interest in Australia Pacific LNG (APLNG) from Origin Energy for up to $1.645 billion, which will be funded from cash on the balance sheet, subject to customary adjustments. The ConocoPhillips subsidiary currently holds a 37.5% APLNG shareholding interest and would own 47.5% of APLNG upon closing if the other relevant APLNG shareholder does not exercise its preemption rights. The transaction is expected to close in the first quarter of 2022 and is subject to Australian government approval. ConocoPhillips’ full-year 2020 production from APLNG was approximately 115 MBOED, and full-year 2021 distributions are expected to be approximately $750 million, excluding distributions resulting from any additional shareholding interest arising from preemption. The effective date of the transaction will be July 1, 2020.

“Today’s announcement reflects our ongoing commitment to further strengthen our company across every aspect of our global portfolio,” said Ryan Lance, ConocoPhillips chairman and chief executive officer. “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 recognizes 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. Through the achievements of APLNG and its other shareholders, Origin Energy and Sinopec, APLNG has become a world-class integrated LNG operation. It will continue supplying customers in the Asia Pacific region with reliable energy that is lower in GHG intensity than many of the alternatives, and thus help meet energy transition pathway demand for years to come.”