During the Enterprise bid battle, Lasmo dropped an intriguing hint that its jointly owned gas company, Vico, was in talks to participate in a Far East project. But it refused to reveal details because of political and commercial sensitivity.
However, sources said the talks concern a massive gas field in the South China Sea off Malaysia's Sarawak state.
Known as Jintan, the field contains gas reserves equivalent to about 1 billion barrels of oil and is expected to cost at least dollars 3bn to bring on stream.
The discussions are being held with Occidental, the big US oil group, and Petronas, the state-owned Malaysian oil concern, which is keen to bring in Vico as a technical partner for the liquified natural gas (LNG) project, code-named MLNG 3. A key reason for this is that Vico is regarded as one of a handful of international companies with LNG expertise.
As technical adviser at Bontang, the world's largest LNG plant in Indonesia, Vico is well known in the region and is seen by the Malaysians as a useful counterweight to Shell, the Anglo-Dutch oil giant that operates the country's two existing LNG ventures.
The negotiations, held amid a simmering diplomatic row between the Malaysian and British governments, are at an advanced stage.
Both Lasmo and Union Texas - Vico's other co-owner - are understood to want a significant stake in the plant and/or an interest in the field in exchange for Vico's expertise.
A successful outcome would enable Lasmo to build on a Far East presence that is largely dependent on operations in Indonesia, which accounts for 46 per cent of Lasmo's production and 40 per cent of its reserves last year.
However, the outcome of talks could also depend on how Nippon Oil, Japan's largest oil refiner and a potential buyer of the gas, responds to the Vico proposals. Nippon is in a powerful position to influence a deal, because it holds stakes in both the licence blocks that the field straddles. In contrast, Occidental holds a large interest in just one block, although it is also the operator.
It has also emerged that Lasmo and Union Texas are pressing ahead with plans to expand Vico's power generation activities in Indonesia, where it is holding separate discussions with the local electricity utility.
The business already operates small gas-fired power stations for its own use, but the idea is to set up and operate commercial plants using surplus gas from Lasmo's Indonesian gas fields.Reuse content