Kiwi firm farms in Sumatra exploration block

By Alexander Ginting

Wellington-based independent oil, gas firm New Zealand Oil & Gas Limited (NZOG) reported on Tuesday that in December 2011, it has acquired an interest in Kisaran PSC, an onshore exploration permit in the central Sumatra Basin.

NZOG has a 22.5% share in the permit via the purchase of a 90% shareholding in one of the existing parties to the joint venture holding the permit, the company said without giving detail.

According to Petromindo.Com data, the block is operated by Pacific Oil & Gas, a Hong Kong company controlled by pulp and paper and palm oil tycoon Sukanto Tanoto.

As part of its due diligence NZOG has identified and assessed six prospects within the permit block, with total mean prospective resources (un-risked) of over 140 million barrels of oil.

Planning is underway to drill one well in the first half of 2012. The prospect has two target zones, with total mean prospective resources (unrisked) of over 40 million barrels of oil.

Under the arangement NZOG has contributed US$6.5m towards the cost of drilling the first well, and will share any future costs on a participating interest basis. The permit is subject to the standard Indonesian Production Sharing Contract (PSC) terms.

NZOG also reported that during the 2011 December quarter it was successful with an application for a Joint Study agreement (JSA) to review an area of open acreage in southern Sumatra.

A JSA involves a six month study period in consultation with an Indonesian institution, after which a priority application can be made for an exploration permit.

Studies are almost complete for the JSA in northern Sumatra which was awarded in August 2011. An application for a third JSA in Sumatra was submitted at the end of December, the company said.

Editing by David Mustakim