Crest to sell Indonesia stake
Wednesday, June 21 2000 - 03:30 AM WIB
Malaysia's Crest Petroleum Bhd said yesterday it expected to sell its stake in a failed Indonesian oil and gas exploration venture at a deep discount within the next three months.
Crest, 39 per cent-owned by conglomerate Renong Bhd, said it was in advanced negotiations to sell its 49 per cent stake in the production sharing contract to an Indonesian consortium.
"We expect to be able to sell our interest in the next three months for an amount which is smaller than the original investment - in the order of $3 million," Crest managing director David F. Wilson told a news conference.
Crest bought the 49 per cent stake in the production sharing contract in Central Sumatra in 1995 with the remaining shares held by Indonesia's state oil corporation Pertamina and PT Petronusa Bumibakti.
The original amount paid for the stake was not clear, but Crest said it had invested 129 million ringgit ($34 million) over three years on exploration alone, which failed to yield substantial oil and gas deposits.
Crest ceased its operations in Indonesia in 1998. Wilson said losses from the sale of its stake in the project would not affect the firm's financial results.
"Everything has already been provided for in the accounts so it's not going to have an impact," he said. "From here on, anything that we are able to recover will be a write-back."
Wilson said he expected the firm's full year profits to be lower in 2000 than in 1999, citing unusually high profit margins last year from its offshore installation activities.
"Our results for 1999 were very good," Wilson said. "We anticipate that for 2000 it will be good. It implies that it won't be as good as it was last year."
The second board-listed Crest posted net profits of 38.97 million ringgit in the year to end-December 1999.
Wilson said he expected T3, one of Crest's two idle drilling rigs, to begin operations in the fourth quarter.
"It has been offered for tender to Esso and Nippon Oil," Wilson said. "We have to wait for the outcome of the tender in next few weeks with expectations the rig will start work in the fourth quarter." Crest may dispose of its other unutilised rig, Wilson said.