Oilex updates C. Sumatra oil, gas block
Tuesday, July 27 2010 - 02:34 AM WIB
WEST KAMPAR PSC, CENTRAL SUMATRA
(Oilex ? 45% + further 22.5% secured*)
On 24 June 2010, the International Court of Arbitration of the ICC (International Chamber of Commerce) has found in favour of Oilex?s wholly owned subsidiary, Oilex (West Kampar) Limited, in its claim against PT Asiabumi Petroleo (Asiabumi) for the recovery of US$4.6million that is owed to Oilex. Asiabumi is the parent company of the Operator (PT Sumatera Persada Energi - SPE).
Oilex commenced the ICC Arbitration against Asiabumi in Singapore in April 2009 following the failure of SPE in early 2009 to repay a debt owing to Oilex under a previous agreement between Oilex and SPE. SPE?s obligations to repay the debt were secured by a parent company guarantee granted by Asiabumi to Oilex in 2008.
The Award granted in Oilex?s favour takes effect immediately. Oilex will pursue the enforcement of the Award to recover the amount due.
SPE continues to allege that Oilex no longer has an interest in the West Kampar Production Sharing Contract arising out of an alleged failure to perform obligations under the farmout agreement entered into by the parties in 2007. Oilex denies those allegations and maintains that it holds its 45% interest in the West Kampar PSC. The Indonesian regulator, BPMIGAS has not transferred Ollex?s 45% participating interest to SPE despite requests from SPE.
Oilex maintains that it is further entitled to have assigned an additional 22.5% to its 45% holding through the exercise of its rights under a Power of Attorney granted by SPE following the failure of SPE to repay the funds due referred to above. The assignment has been provided to BPMigas but has not yet been approved or rejected. If the debt due to Oilex is satisfied, it will not pursue this assignment.
As reported in the last Quarterly, Oilex has not been served with the claim filed in January 2010 by SPE in an Indonesian court seeking damages from Oilex for alleged defamation arising out of correspondence relating to SPE?s performance as operator. Oilex rejects the allegations in the claim and, if served, will vigorously oppose them.
Oilex understands from industry communications and reports in the Indonesian press that SPE has drilled and tested a second well (Pendalian 4) in the Pendalian Field earlier this year. Oilex is aware of recent Indonesian press which claims significant flow rates from multiple zones in the Pendalian 4 well during testing and refers to plans for development of the Pendalian Field. Due to SPE's claim relating to Oilex?s interest in the PSC, for over a year Oilex has not been provided by SPE with any data relating to the West Kampar PSC operations including any results of testing the Pendalian 4 well. Oilex is therefore unable to comment on or endorse the press reports.
Oilex will continue to take steps to advance its participating interest in the West Kampar PSC and to pursue enforcement of its Arbitration Award while remaining open to a commercial resolution to the Joint Venture dispute. (end of excerpt)