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UPDATE 1-Italy's Eni set to take over Indonesian Deepwater Development -regulator

* Eni already a partner in project

* Chevron divestment part of global streamlining

* Value unclear; deal in “finalisation process” -regulator (Adds quote, details)

JAKARTA, Sept 30 (Reuters) - Italy’s Eni is expected to take over the Indonesian Deepwater Development (IDD) project as operator Chevron sells its interest in the gas venture, the chairman of the country’s upstream oil and gas regulator said on Wednesday.

Chevron confirmed in January its plan to sell its 62% interest in IDD project as the company makes global changes to cut costs and streamline operations. Eni is already a partner in the project, along with China’s Sinopec.

SKK Migas chairman Dwi Soetjipto told lawmakers that discussions were at the “finalisation process”.

“There are many positive aspect to Eni replacing Chevron, such as reducing the size of investment to production facilities and (IDD) can be connected to Eni’s Jangkrik gas field,” he said.

Eni did not immediately respond to a request for comment.

Chevron declined to give details on the negotiations but said in an e-mail “the project will have value for another operator and the Kutei Basin can continue to be developed safely and responsibly,” referring to the area of the project.

The IDD project located in the Makassar Strait, involves the Bangka, which started production in 2016, as well as the Gendalo and Gehem gas fields.

IDD in 2019 had an average daily production of 2,000 barrels of liquids and 33 million cubic feet of natural gas, according to Chevron’s website.

Dwi did not disclose the estimated value of the deal.

SKK Migas last year lowered its peak gas output estimate for the IDD project after Chevron cut investment due to a change in the facility’s design, a regulatory official said.

Peak output was expected to reach about 700-800 million standard cubic feet per day (mmscfd), compared with an initial estimate of more than 1 billion cubic feet per day (bcfd), when the remaining two gas hubs start production, the official said. (Reporting by Agustinus Beo Da Costa Additional reporting and writing by Fransiska Nangoy; Editing by Martin Petty)

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