Sinopec completes 18-% stake purchase in Chevron Indonesian deep-water project

Sinopec International Exploration and Production Corporation (SIPC), a wholly-owned subsidiary of China's state-owned Sinopec Group, has completed its $680 million acquisition of an 18-per cent stake in Chevron Corp's Indonesian deep-water project.

In December 2010, Sinopec, Asia's largest crude refiner, said that it will acquire an 18-per cent stake in Chevron's $8-billion Gendalo-Gehem deep water natural gas project in Indonesia, for $680 million

Chevron, which has been operating in Indonesia for over 80 years and is one of the largest oil and gas producers in the south east Asian country, had said in November 2009 that it would seek partners for a partial farm-down of its holding in the Gendalo-Gehem project in order to alleviate risk in the venture.

Chevron, based in San Ramon, California, owns 80 per cent of the project, while Eni of Italy and Indonesia's state-owned oil and gas company PT Pertamina own the remaining 20 per cent.

Sinopec will gain technical experience in deep water gas exploration through this acquisition since the gas deposits in the Gendalo-Gehem project lie beneath 6,000 feet of water.

The Gendalo-Gehem project consists of three blocks located in the Makassar Strait offshore East Kalimantan in water depths of approximately 6,000 feet. These blocks had produced 28 million barrels of oil and 168,000bn cu ft (4,757bn cu m) of natural gas by the end of 2009.