GSS signs agreement with Pertamina EP for Trembul operation area
Friday, November 4 2016 - 12:16 AM WIB
SGX-listed GSS Energy Limited said it has through its subsidiary company, PT Sarana GSS Trembul (PT SGT), entered into an Operation Cooperation Agreement with Indonesia?s state-owned oil and gas company PT Pertamina EP for the production of petroleum, including oil and gas, in the Trembul Operation Area in Central Java.
The company said in a statement Thursday the Trembul Operation Area has a size of 47.6 square kilometers. According to a Qualified Person?s Report (QPR) conducted in 2015, the Area is estimated to have approximately 24.3 million stock tank barrels of contingent resources at depths up to 800 meters; no estimate has been done beyond this depth.
The company explained PT SGT has been contracted by Pertamina EP to assist with the production of petroleum, including oil and gas, in the Area for a period of fifteen (15) years. Production shall commence upon the submission of a US$1.5 million bank guarantee to Pertamina EP for the initial commitment period of three years. The total commitment for the work programme over the initial commitment period of three years is anticipated to be approximately US$7.9 million.
GSS said under the terms of the Agreement, there is no minimum level of production required. Pertamina EP will retain the right to market and sell all the petroleum produced in the Area, and PT SGT may transfer the rights and obligations of the Agreement if it has completed its work programme for the initial commitment period of three years and received Pertamina EP?s approval.
The Agreement entitles PT SGT to 23.5 percent of the petroleum and 31.4 percent of the natural gas produced in the Area, after accounting for operating costs. In addition, PT SGT will be able to recover all its operating costs from the petroleum produced in the Area under Indonesian regulations governing cost recovery for such operation cooperation agreements.
Commenting on the entry into the Agreement, Sydney Yeung, Group CEO of GSS Energy, commented, ?Reaching production in the Trembul Operation Area will be our Group?s next objective and priority. The commencement of production will improve our oil and gas business tremendously.?
Editing by Reiner Simanjuntak