Easco acquires Sukaraja block for US$12 million

Oil and gas company Easco Petroleum has taken over Sukaraja oil field in South Sumatra from PT Radeka Sukaraja Energindo, Bisnis Indonesia newspaper reported in its Monday edition.

The acquisition cost including expenses for reactivation of production reached US$12 million, an executive from the Easco Group said.

Here the reactivation costs mean the money Easco has to spend on reactivation of nine oil wells with 1,000 barrels of oil per day production capacity or 360,000 barrels per year.

Easco Group chief executive officer Emil Abbas said the oil field located at Sukaraja village was managed by PT Radeka Sukaraja Energindo under a partnership with state-owned oil and gas company PT Pertamina. Since PT Radeka has encountered financial problems, the oil field was offered to the new investor.

“We have finished the acquisition of Sukaraja oil field. We are in the process of reactivating oil wells so that the production can go on and the total cost of the acquisition and production costs reached $12 million,” Emil Abbas told Bisnis last week in Jakarta.

But he didn’t give any details about break up figures for acquisition and production.

He said the oil field will start its production from April 1 this year.

As far as the partnership with Pertamina is concerned, it is in the shape of Technical Assistance Contract (TAC).

Sukaraja oil field was earlier managed by Stanvac from 1980 to 1983 through a contract from Pertamina, Easco’s president director Etty Sunarti said.

Later Pertamina managed the oil field directly until 1999 when the field was closed due to mainly two reasons – lack of production and not economical.

But PT Radeka bought the field on 7 August 2002 by signing a TAC with Pertamina. (*)