Malaysia's Ranhill to buy 49 pct stake in W. Java oil, gas block

Malaysian firm Ranhill Berhad said Wednesday it had signed a Conditional Sale and Purchase Agreement on 18 May 2004 to acquire 49 percent equity interest in a company that operates an oil, gas block in West Java for US$ 6.1 million, with an option to acquire an additional 2 percent at a later date.

Its wholly-owned subsidiary, Ranhill Energy Sdn Bhd, will buy the stake in Ellipse Energy Jatirarangon Wahana Ltd (EEJW) from Ellipse Energy Ltd, a company incorporated in Bermuda.

EEJW is the principal and operating concession holder for the Technical Assistance Contract (TAC) for Jatiraragon Block near Jakarta, with 70 per cent interest in TAC.

The concession is for 20 years, from 22 May 2000, to 22 May 2020. The remaining 30 percent interest is held by PT Wahana Sad Karya ("WSK"), a local Indonesian company. The project is now in the final stages of its first development phase, with the first two wells expected to begin production in August 2004.

State gas distribution firm PGN had signed principal agreement with the TAC, in which the latter would supply up to 30 MMCFD of gas per day starting this year for 10 years to the former.

Ranhill said the expansion of the oil and gas engineering business will provide a support base for its domestic and international initiatives, which would better prepare it to undertake large-scale engineering contracts in the sector and related downstream activities.

The proposed acquisition of EEJW will also enable Ranhill to build up its long-term revenue streams and a strong asset base. The focus on the energy sector regionally, besides the strong growth potential, will allow it to capitalise on its engineering and construction expertise.

Ranhill president and chief executive Tan Sri Hamdan Mohamad said that by having a vested interest in the upstream gas field, Ranhill could position itself to propose ?Independent Power Producer? projects to alleviate Indonesia?s acute power inadequacy.(alex)