Kufpec signed its production-sharing contract with RI

Mr A.R.Al-Arbeed, Chairman and Managing Director of Kufpec Kuwait, was present yesterday for the signing of Kufpec (Indonesia) Limited's PSC for the further twenty year exploration and development of oil in Eastern Indonesia.

Kufpec has been leading a group of companies in the search for oil in this remote and geologically complex area since 1985. Up to the end of 1999 Kufpec and its partners will have invested a total of US$ 109 million in the exploration area. Kufpec is committed to spend US$ 29 million in exploration activities over the next 6 years.

After a number of geophysical and geological surveys and the drilling of three deep exploration wells Kufpec tested oil at rates to 3,800 barrel per day in the Oseil-1 well in 1994. This was the first substantial oil flow from the Pre-Tertiary rocks of Eastern Indonesia.

Following successful appraisal of the Oseil-1 discovery in 1998 by drilling two additional appraisal wells, Pertamina has approved a plan development for the first phase development and production of the Oseil field. Production will commence at the end of 2001. The expected production rate is approximately 14,000 to 18,000 barrels per day of crude.

In addition, to the US$ 29 million committed for on going exploration over the next 6 years, Kufpec is also committed to the first phase of the Oseil development requiring US$ 128 million of development and operating cost, with first production scheduled for November 2001.

Besides its Eastern Indonesian commitments, Kufpec has also been involved in production operations in the Natuna Sea Block A since 1990, and is expected to spend US$ 50,6 million as part of the West Natuna Gas Project. This project includes a gas export pipeline

from Natuna Sea to markets in Singapore. First gas sales to these markets are expected to commence in the second quarter of 2001 (between May to July). (*)