CNN Money, November 23, 2009: 02:24 PM ET
HOUSTON -(Dow Jones)- Oil giant Chevron Corp. (CVX) confirmed Monday it is seeking partners for the multibillion-dollar Ganal-Rapak deep sea gas project off Indonesia's East Kalimantan province.
"The process is ongoing and subject to approvals by the government of Indonesia," spokesman Kurt Glaubitz told Dow Jones Newswires in an email, adding that the company is "not disclosing details related to the process at this stage."
A person familiar with the matter said Chevron, the second-largest U.S. oil company by market value, was seeking to reduce its 80% stake in order to mitigate risk in the venture, which could cost about $8.5 billion to develop.
The move is a sign that the economic recession is making even financially strong companies prune their assets in an effort to reduce risk, become leaner and raise cash to focus on shorter-term projects.
The East Kalimantan concession includes the Ganal Block that covers the Gehem and Gendalo gasfields and the Rapak Block that includes the Ranggas gasfield. According to press reports, the company has said production from the blocks is expected to start in 2016. Italy's Eni S.p.A. (E, EMI.MI) holds the remaining 20% interest in the project. Indonesia state-owned PT Pertamina has said it is interested in acquiring a 10% interest.
The development of the Rapak and Ganal blocks is seen as key improving Indonesia's declining gas production.
San Ramon, Calf.-based Chevron is one of the largest oil and gas producers in Indonesia.
-By Isabel Ordonez, Dow Jones Newswires; 713.547.9207; isabel.ordonez@ dowjones.com
(I Made Sentana in Jakarta and David Winning in Sydney contributed to this article)
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