Energi Mega plans to divest part of ownership in Mozambique oil, gas block

IDX-listed upstream oil and gas company PT Energi Mega Persada Tbk is considering to divest part of its ownership in the recently acquired Buzi oil and gas block in Mozambique to raise funds to help repay its debts.

?But right now, we are studying many ways to reduce the debt burden. One of the ways is by selling some of our stake in Buzi [block],? Energi Mega Finance Director Didit Ratam was quoted by The Jakarta Globe on Monday as saying.

Energi Mega announced in October of this year that it had acquired oil & gas Exploration and Production Concession Contract (EPCC) for Buzi Block in the African country.

Following the deal, Energi Mega owns 75 percent participating interest in the block in a partnership with the Mozambique government who owns 25 percent through Empressa Nacional de Hidrocarbonetos (ENH). The US$175 million acquired block is projected to start production in 2017.

Buzi block has caught the attention of many international oil and gas firms, especially following the discovery of 283 billion cubic feet of proved and probable gas reserve there, which is ready to be produced by 2017. In addition, the block has 13.4 trillion cubic feet of gas prospective resources.

According to Energi Mega?s financial report submitted to the Indonesia Stock Exchange, the company?s total liabilities and debts reached $1.27 billion as of Sept. 30, after it stood at $1.38 billion in December 2012.

Meanwhile, the company?s equity rose to $928.77 million by the end of September from $690.8 million at the end of last year.

Didit did not provide a specific time-frame for the plan to sell the stake in the Buzi block. He also did not specify the value of the shares the company plans to sell.

Energi Mega President Director Imam Agustino said the company planned to retain a majority interest in the Buzi block despite the plan to sell some of its interest. (*)