Energi Mega in talks with banks to finance Kangean acquisition

Publicly listed oil company PT Energi Mega Persada said Thursday it was currently talking with some foreign and local banks, including Bank BNI, over a scheme to finance the acquisition of Kangean block in East Java.

?The plans to purchase Kangean block will be decided at company shareholders meeting scheduled in the end of September,? Energi Mega said in a statement to the Jakarta Stock Exchange, adding that the meeting would also pick a scheme to finance the acquisition.

Kangean production sharing contract is operated by Anglo-American energy giant BP plc. The block covers the Pagerungan gas fields (already in production), Terang Sirasun and Batur fields. The contract of the block expires on Nov. 13, 2010.

Consultancy firm DeGolyer MacNaughton certified in April 1995 that proved (1P) gas reserves in Pagerungan field was 1,45 TCF, while Terang Sirasun and Batur fields, which are yet to be developed, had combined proven reserves of 1,26 TCF.

Pagerungan gas field is currently producing 110 million cubic feet of gas per day and 1,000 barrels of condensate per day, according to the statement.

Energi has reportedly struck a deal to buy BP's 100 percent interest in Kangean for US$ 170 million.(robert)