Cepu Sakti signs deal with cooperatives to manage, fund 91 old oil wells
Wednesday, July 16 2014 - 02:23 AM WIB
Oil and gas firm Cepu Sakti Energy Pte Ltd (CSE) has entered into a cooperation agreement with KUD Sumber Pangan, a village cooperatives, granting the firm the right to manage at least 91 old oil wells located in the Kawengan Village, Kedewan District, Bojonegoro Regency, in East Java Province.
The June 20, 2014 agreement made by PT Cepu Sakti Energy (a 95-percent owned subsidiary of CSE) with the village cooperatives was revealed on Wednesday by SGX-listed manufacturing firm Giken Sakata Ltd, which in April signed an MoU with Java Petral Energy Pte Ltd to acquire 51 percent shares in CSE for S$48 million.
?The board understands from the target group that: (i) under the KUD SP Agreement, Cepu is responsible for funding the drilling and the operational costs of the old oil wells and bearing the costs incurred for deepening wells in return for the right to acquire a substantial proportion of the revenues arising from the oil that is produced; and (ii) the KUD SP Agreement is valid for a period of 10 years, and may be extended for an additional 5 years,? Giken said in a Wednesday filling with the Singapore Stock Exchange.
Giken said in April that Java Petral owns 95 percent shares of CSE, which has a 10-year agreement for two oil fields with local village cooperatives. The concession covers 148 wells in the Dandangilo-Wonocolo and Tungkul areas in East Java?s Cepu oilfield. These two oilfields have an estimated 10 mmbo of recoverable reserves. Work is already underway on 12 initial wells.
Editing by Reiner Simanjuntak