KUFPEC offers 40% interest in Seram (Non-Bula) PSC

BACKGROUND
KUFPEC, a subsidiary of Kuwait Petroleum Corporation, is focused on international exploration, development and production activities the Middle East, Africa, Asia, and Australia. KUFPEC has assumed both operator and non-operator positions in its projects with participating interests typically 30% to 40%. KUFPEC has held its Seram position in Indonesia (through its wholly-owned subsidiary, Kufpec, ( Indonesia) Ltd (?KIL?)) for approximately 20 years and is geared towards expanding its position in Indonesia. To this end we believe the Offering presents you with a good opportunity to participate in the realization of the full potential of the Seram (Non-Bula) PSC.

OVERVIEW
KUFPEC owns and operates a 97.5% working interest in the Seram (Non-Bula) PSC, which includes the producing Oseil oil field, its associated facilities and significant exploration potential over a large area. The development of the Oseil oil field follows successful drilling of several horizontal and vertical oil wells into the Jurassic Manusela Carbonate (please see: http://www.waterous.com/kufpec2005/intromap.pdf).

Utilizing newly reprocessed seismic information and production optimization techniques, KUFPEC is in a position to pursue further development of the Oseil field with a partner who is expected to contribute both technically and financially to the exploitation of the existing and future reserve bases. Substantial investments have been made in acquiring seismic data, drilling and facilities and $278 million remain fully cost recoverable under the terms of the PSC agreement.

To support its initiatives, KUFPEC has completed the construction of a 22,000 bbl/day topping plant with export and storage facilities. Crude is processed onsite into naphtha and high sulphur fuel oil and sold on the open market via shipments from KUFPEC?s marine terminal. KUFPEC?s facilities are unique to the region and may attract third party oil for both processing and marketing activities. KUFPEC?s facility allows for increased production sales revenues and facilitates incremental production gains in what was previously a remote area for exploitation activities in eastern Indonesia.

KUFPEC has identified significant exploration potential through an inventory of prospects and leads which is supported by a geophysical data base comprised on 3-D and 2-D seismic data as well as gravity data covering a large part of the PSC area.

KUFPEC is seeking a Joint Venture partner interested in acquiring ~40% of its interest in the Seram (Non-Bula) PSC and in working together to accelerate the development of the Oseil field as well as to assess new drilling initiatives for further development and exploration.

Key Highlights of the Offering
o An opportunity to acquire a ~40% working interest in the development of the Oseil field and access to broader PSC exploration opportunities
o KUFPEC is flexible under which terms are presented for Oseil including production milestones benefits and is receptive to partial exchange of exploration acreage in the region
o Current daily production of ~4,000 bbl/day (gross) of 22 degree API oil at the Oseil field
o Prior sunk costs of ~$280 million (100%) which is fully recoverable under the PSC
o Further developmental drilling scheduled to continue in 2006
o Recent 3-D seismic evaluation indicates reservoir upside through improved placement of wells
o Recently completed facilities include a topping plant and a marine export terminal
o Large inventory of prospects and leads
o Additional inventory of production optimization opportunities
o Established operating team based in Jakarta
o The Offering represents a not-to-be-missed opportunity to acquire a ground floor position in an oil development project with significant reserve and production upside. The additional inventory of identified exploration opportunities further enhances the long-term viability of the project.

TIMETABLE
The expected timetable is as follows:
Information Memorandum/VDR-CD to be made available the week of: January 16, 2006
Data Rooms to be open in Singapore the week of: January 30, 2006
Initial Bids to be due at 3:00 p.m. ( London Time): March 15, 2006

Interested parties will be required to execute a Confidentiality Agreement to be faxed to the attention of Bill Hancock at Scotia Waterous? London office at +44 20 7491 4123. If you should have any comments on the Confidentiality Agreement, please direct your comments to KIL?s counsel, Adam Summerly of Jones Day who can be reached at tel: +65 6233 5994 or at email: asummerly@jonesday.com

Upon receipt of the Confidentiality Agreement, you will be provided with an Information Memorandum and VDR CD. You will also be invited to attend a Data Room which will include a seismic workstation and other information relevant to the Offering. The Data Room will be located in Scotia Waterous? office in Singapore.

CONTACTS
We would be delighted to meet with you to present this opportunity further and to explore the strategic fit which the Offering will bring to your current program. Please note that Scotia Waterous should be the only point of contact for your company with regard to the Offering. Should you have any questions, please feel free to call any of the following:

Scotia Waterous
Doug De Filippi: doug_defilippi@scotia_waterous.com +44 20 7569 1312
Jonathan Wolf: jonathan_wolf@scotiawaterous.com +44 20 7569 1301
Bill Hancock: bill_hancock@scotiawaterous.com +44 20 7569 1306
Rene McKale: rene_mckale@scotiawaterous.com +1 832 476 6403

London
5 Mount Street, Mayfair
London W1K 3NE
United Kingdom
Tel: +44 (0) 20 7495 2025
Fax: +44 (0) 20 7491 4123
london@scotiawaterous.com

Source: Scotia Waterous