Nov. 4 (Bloomberg) -- Inpex Corp., Japan’s largest energy explorer, will sell a 10 percent stake in an Indonesia offshore oil block to PT Energi Mega Persada Tbk. Shares of Energi Mega surged.

The sale is subject to approval from the Indonesian government, the Tokyo-based company said in an e-mailed statement today. Inpex currently owns the entire Masela block in the Arafura Sea, off the coast of Indonesia.

Inpex plans to produce 4.5 million metric tons of liquefied natural gas a year and 13,000 barrels of condensate daily from the Abadi area within the Masela block, using floating LNG plant technology, according to today’s statement. The initial output may begin in 2016, it said.

Shares of Energi Mega, Indonesia’s second-largest publicly traded oil company, rose as much as 14 percent to 320 rupiah in Jakarta trading, the biggest gain in four months, while PT Bakrie & Brothers, which owns 40 percent of Energi Mega, jumped as much as 9 percent. Inpex climbed 0.3 percent to close at 756,000 yen in Tokyo before the announcement.

Indonesia’s oil and gas regulator BPMigas said in September that Inpex’s investments in Masela may be cut by $2 billion to $3 billion from an earlier projection of $19 billion.

The Abadi plant will be Inpex’s second LNG project, after the proposed Ichthys plant in Western Australia. The two ventures will produce fuel equivalent to about 20 percent of Japan’s current LNG import volume, according to the statement.

To contact the reporter on this story: Naila Firdausi at nfirdausi@bloomberg.net.

Last Updated: November 4, 2009 03:31 EST