ConocoPhillips to complete Indonesian assets sale this month
Tuesday, July 1 2003 - 08:11 PM WIB
ConocoPhillips had been offering for sale its interests in four oil, gas blocks in Sumatra; namely Kakap PSC offshore Natuna, Block A PSC onshore Aceh, Tungkal PSC and Jambi PSC in South Sumatra.
The source said on Wednesday that the sale had drawn attention from oil and gas industry, with Kakap PSC as main attraction. ?Kakap PSC is producing oil and gas block with established long-term gas market. It provides steady cash flow; beside, the block still has exploration potential,? said the source.
Currently, said the source, two companies are short-listed for Kakap block. The source declined to name the companies? name, but said that Exspan Nusantara, a subsidiary of JSX-listed oil and gas company Medco Energi International Tbk, which had earlier confirmed participation in the bidding had withdrawn its bid. ? Both remaining companies are Indonesian companies,? said the source.
Below is the highlight of the four blocks offered, taken from Waterous & Co?s website. Waterous has been appointed by ConocoPhillips as sole advisor to assist the assets sale.
KAKAP PSC: ConocoPhillips owns a 31.25 percent operated interest in the Kakap PSC located in the Natuna Sea, approximately 480 kilometres northeast of Singapore in Indonesian waters. Current working interest (?W.I.?) production averages 2,900 bbl/day and 20.3 MMCFD from four platforms and five subsea tiebacks (nine fields). Oil is processed through the Kakap Natuna FPSO, currently undergoing a major refurbishment. Gas is sold through the PSC?s 20 percent interest in the West Natuna Transportation System (?WNTS?) to premium priced markets in Singapore. The pipeline in itself is strategic in its position and ability to service the Singapore market for years to come. ConocoPhillips, through the Kakap offering will be selling a 6.25 percent working interest in the WNTS. Net cashflow for 2002 from the Kakap PSC was US$15.5 million. ConocoPhillips has also identified 21 exploration prospects and an inventory of production and infrastructure upside opportunities.
BLOCK A PSC: ConocoPhillips owns a 50 percent operated interest in the Block A PSC, which is located in northern Sumatra, approximately 45 kilometres southeast of ExxonMobil?s giant Arun Gas Field. A Plan of Development (?POD?) for three gas fields was approved with forecast production to average 56 MMCFD (W.I.) by 2006. New interest and activity in the region confirms the strategic fit of Block A volumes for domestic markets or export to Malaysia. ConocoPhillips has identified 14 prospects with significant gas reserves that are supported by seismic data. Additional discoveries, including Kuala Langsa (1.2 TCF recoverable), await further evaluation. ConocoPhillips also receives a before tax production payment of approximately US$2.0 million per year from the prolific Arun Field. This long-term payment will also be included in the sale.
TUNGKAL PSC: ConocoPhillips owns 100 percent of the extensive Tungkal PSC in southern Sumatra. A POD for the Mengoepeh Oil Field was submitted in September 2002 with production scheduled to commence in 2006 at an initial rate of 5,000 bbl/day. Additional gas-to-power potential from existing gas discoveries has also been identified. Significant drillable oil and gas potential has also been identified on 2-D and 3-D seismic data. ConocoPhillips will also consider farm-in offers for this asset.
SOUTH JAMBI B PSC: ConocoPhillips owns a 45 percent operated interest in the South Jambi B PSC in southern Sumatra. A POD was approved in 2001 for three gas fields and construction of gas processing facilities is currently underway. Production is expected to begin 1st Quarter 2004 at rates averaging 11 MMCFD (W.I.) increasing to 42 MMCFD (W.I.) for export to markets in Singapore. ConocoPhillips? participation and coordination of the construction of the new trunkline extension from East Sumatra to Singapore ensures that the timetable for delivery of this long-term, premium priced gas supply from South Jambi B will be met. Finally, in the southern portion of the PSC, immediately offsetting the prolific Corridor Gas Project, several significant gas discoveries have been made and require further technical evaluation. (godang/robert/arry)