El Paso to buy 50 percent interest in Bone PSC

Australian oil and gas firm Energy Equity Corporations (EEC) said American gas energy company El Paso International would buy 50 percent interest in the Bone production sharing contract (PSC) block offshore Bone Bay, South Sulawesi, making both companies have equal shares in the block.

EEC, which is listed on the Australian Stock Exchange, said in a financial report obtained by Petromindo.Com that both companies would conduct explorations and production in the block over the next three years to increase their gas reserves in the province.

"El Paso International is to acquire a 50 percent interest in the block from EEC and jointly, an exploration and development program is planned over the next three years with the objective of further increasing the company's gas reserves base in South Sulawesi," the company said last week.

EEC however did not provide details on the timeframe for El Paso to realize the acquisition or the price for the 50 percent acquired shares.

EEC was awarded the Bone PSC last year.

EEC and El Paso are partners in the Sengkang PSC, also located in the province, with each of them having 50 percent of the gas block.

Sengkang PSC supplies gas to the US$225 million combined cycle Sengkang power plant, which is owned by EEC (47.5 percent), El Paso (47.5 percent) and local firm PT Trihasra (5 percent), controlled by former President Soeharto's daughter Siti Hadiyanti Rukmana, also known as Tutut. The power is supplied to state electricity company PT PLN.

EEC said the Sengkang block contains 542 billion cubic feet (bcf) of proven and probable gas reserves, of which 160 bcf is committed to the Sengkang power station.

EEC also said aside from the Bone PSC, it was awarded by state oil and gas company Pertamina a technical assistance contract (TAC) on the Gajah Besar block in South Sumatra. It is the third TAC obtained by the company from Pertamina after two TACs on the Talang Babat and Biru blocks, also in South Sumatra. The three TAC blocks are wholly owned by EEC.

It said it was seeking to extend the contract period for Talang Babat and Biru.

"EEC has continued seeking partners to develop the gas field with a view for the gas to be sold to PLN for power generation. EEC plans to pursue this opportunity once the financial circumstances in Indonesia are satisfactorily resolved," the company said.

Aside from Sengkang, Bone, Talang Babat, Biru and Gajah Besar, EEC has also an interest in the Lematang block in South Sumatra operated by British firm Amerada Hess. (Bodega)