INPEX will transfer a 25 per cent stake in a block offshore Malaysia to Australia’s Santos, but will retain a 50% operating stake in the field.

Deep-Water Block S covers 57,400 hectares off East Malaysia in water depths of between 200 metres and 1,500 metres.

The block lies in the Sabah basin where large reserves of oil and natural gas, such as the Kikeh and the Gumusut-Kakap oil fields were discovered following three-dimensional seismic survey and geological and geophysical studies conducted by INPEX Sabah.

Based on the result of the studies, INPEX is planning to drill wildcat wells this year in the hope of making new discoveries.

INPEX and Santos are jointly engaged in many oil and gas exploration and production activities such as the Bayu-Undan Project in the Joint Petroleum Development Area between Australia and Timor-Leste and several exploration permits adjacent to the Ichthys LNG project offshore north-western Australia.

INPEX said the agreement would further strengthen the relationship between the two companies.