Chinese firm acquires interest in East Indonesia oil block

Chinese energy and mineral producer listed in Hong Kong Stock Exchange CITIC Resources Holdings Ltd. announced on Thursday it had agreed to acquire 51 percent participating interest in Seram Non-Bula PSC in Maluku province from Kuwaiti?s KUFPEC for US$97.4 million.

The Seram Non-Bula Block is located on Seram Island, Indonesia and occupies an area of about 4,572 square kilometres. The principal field in the block is the Oseil Field. The average production in the first six months of 2006 was about 4,300 barrels per day (gross) of 15? to 22? API oil.

The gross oil reserves of the Oseil Field have been estimated by independent technical advisers to be about 39 million barrels as at 31 December 2005 and comprises 7 million barrels of proven reserves, 6 million barrels of probable reserves and 26 million barrels of possible reserves.

Under the Production Sharing Contract (PSC), the Contractor has been granted a 100% right to explore, develop and produce oil from the block until 2019. The current Contractor comprises KUFPEC and Lion presently holding 97.5% and 2.5% respectively of the Contractor?s rights and obligations under the PSC.

After completion of take over, CITIC will take over the block?s operatorship from KUFPEC. KUFPEC will retain 30 percent interest in the block. Australian junior oil firm Lion Energy holds 2.5 percent interest, with the remaining interest will go to an undisclosed company. (alex)