Southeast Asian player offloads stake in gas field as it shifts to clean energy

Coro Duyung, a subsidiary of Southeast Asia’s Coro Energy, has taken the last step toward closing its fossil fuels chapter by inking a deal to divest its interest in a natural gas field in the West Natuna Sea off the coast of Indonesia to devote its time and resources to greener ventures by focusing on its renewable energy portfolio.

In with the clean energy arsenal, out with the fossil fuels segment seems to be Coro Energy’s roadmap, as it has conditionally sold its 15% interest in the Duyung production sharing contract (PSC), holding the Mako field operated by Conrad Asia Energy’s wholly-owned subsidiary West Natuna Exploration Limited (WNEL) with 76.5% interest, with Empyrean Energy holding the remaining 8.5% stake.

Conrad’s WNEL is the buyer of the firm’s interest in this asset, which represents the final stage of the Asian player’s strategic pivot to clean energy in Southeast Asia and enables it to focus its resources on its portfolio of renewables in Vietnam and the Philippines.

The sale is subject to, among other things, obtaining approval from Indonesia’s Ministry of Energy and Mineral Resources (MEMR) for the transfer of the participating interest to WNEL on or before August 31, 2025; and the go-ahead from Coro’s shareholders for the terms of the agreement at a general meeting to be held on or before May 15, 2025.

The sale deal provides for the release of Coro Duyung from any obligation to pay existing or future cash calls; a total cash consideration of $300,000 to be paid by Coro to WNEL following shareholder approval, representing a $477,000 saving on the amounts Conrad maintains to be outstanding by Coro Duyung as of the end of December 2024.

Following receipt of the government approval, 500,000 new ordinary shares are to be issued to the firm at no par value in Conrad, and the issue of further new ordinary shares in Conrad to Coro equal in value to $750,000 within 45 days of the first commercial production from the Duyung PSC.

However, if Conrad or WNEL’s interest in the Duyung PSC falls below 20%, then such payment may be reduced depending on the extent of that reduction. The Southeast Asian player explains that the proposed disposal follows a long period of continued ongoing costs required to support the asset without achieving expected commercial milestones.

Tom Richardson, Coro’s Chairman, commented: “This is a pivotal moment for Coro and the result of a long process to streamline and strengthen the company’s portfolio and anchor our renewables strategy in SE Asia, which continues to progress very successfully.

“Having recently completed the restructuring and refinancing of the company and now brought clarity and focus to our portfolio, I believe we have a strong platform for growth and look forward to updating shareholders on this transaction and further news-flow.”

The sale agreement comes almost a month after the Indonesian Ministry of Energy and Mineral Resources (MEMR) disclosed a directive for all the gas from the Mako field to be made available for the domestic market. PT PLN Energi Primer Indonesia (PLN), a wholly owned subsidiary of PT Perusahaan Listrik Negara (PT Persero), intends to buy this gas for use in Batam, Indonesia.

Located in the Riau Islands Province in Indonesian waters, approximately 400 kilometers northeast of Singapore, the Mako field in the Duyung PSC, valid until January 2037, is estimated to contain 2C contingent resources of 376 billion cubic feet (bcf), 187 bcf of which are net attributable to Conrad.