Cooperatives terminates oil cooperation agreement with CSE
Friday, July 24 2015 - 01:23 AM WIB
SGX-listed GSS Energy Limited said that a March 2013 agreement between its subsidiary PT Cepu Sakti Energy (PT CSE) and Sumber Pangan Village Cooperatives (KUD SP) for cooperation in the development of old oil wells at Dandangilo-Wonocolo and Ngrayong Fields in Kedewan-Bojonegoro, East Java, has been terminated by the latter.
GSS Energy said in a statement Friday that KUD SP has terminated the agreement because it no longer requires the services of PT CSE after PT Pertamina EP (PEP) terminated the Production of Oil from Old Wells Agreement dated October 13, 2012 entered into between PEP and KUD SP.
?We are disappointed by the termination. We had acquired the stake in CSE, the holding company of PT CSE, in September 2014, on the basis that PT CSE would be able to participate in the oil extraction services business in these areas. With this termination, we would have to re-evaluate our investment in CSE,? said GSS Energy CEO Sydney Yeung.
The company had on September 10, 2014 acquired from Java Petral Energy Pte. Ltd. (JPEL) 53.68 percent of the issued share capital of the Cepu Sakti Energy Pte. Ltd. (CSE), which in turn owns 95 percent of the issued share capital of PT CSE.
?In connection with the acquisition, JPEL had given certain representations and warranties in the underlying sale and purchase agreement dated 31 May 2014, which relate to, inter alia, the existence and enforceability of operations in Dandangilo-Wonocolo. In light thereof, the company is seeking legal advice on the termination of the Cooperation Agreement and will make further announcements, as appropriate, to update its shareholders,? GSS Energy said.
GSS Energy, however, said that the termination does not affect its overall strategy and activity in the oil and gas services sector. ?In May 2015, we entered into an agreement with Ramba Energy Limited to participate in the exploration program at the West Jambi Block in Sumatra, Indonesia. In June 2015, we entered into an agreement with AFCO Energy Pte Ltd to jointly set up GSSAFCO Pte Ltd to engage in the marketing and distribution of mineral oil and crude oil products and related businesses in Indonesia.?
?We have continued to actively seek new opportunities in the oil and gas services sector in Indonesia, focusing on regions where we have leverage. We will continue to work hard to remain a viable player in the oil and gas services sector,? it added.
Editing by Reiner Simanjuntak