Australian independent Santos has entered into the deepwater arena offshore eastern Malaysia, doing a deal with Japan’s Inpex that sees it take a 25% interest in a block off the coast of Sabah.

Inpex said its wholly-owned subsidiary Inpex Offshore Northwest Sabah, Ltd. reached agreement to transfer the 25% participating interest in Deep Water Block S to Santos, with Inpex to remain operator. Covering an area of 574 sq km with water depths ranging from 200-1,500 m (656-4,921 ft), the block is located in the Sabah basin where large reserves of oil and gas exist (including the deepwater Kikeh and Gumusut-Kakap oil fields).

The Japanese operator acquired the block in 2012 along with Petronas Carigali as partner (25%). It has conducted a 3-D seismic survey and carried out geological and geophysical studies, with plans to drill several wildcat wells before the end of this year.

Inpex and Santos are, of course, already established partners in several other areas including the Bayu-Undan project.