Premier Oil updates Indonesian operations

The following is an edited excerpt on trading and operations update released by Premier Oil on Monday

Natuna Sea Block A ( Premier Operator, 28.67% interest)

In Q4 2007 Premier announced the signature of Heads of Agreements with Sembcorp Gas Pte Ltd for gas sales into the Jurong petrochemical complex in Singapore, and with PT Perusahaan Listrik Negara (PLN) and PT Universal Batam Energy (UBE) for use in power generation in Batam. Definitive agreement discussions are now under way.

Development of the Gajah Baru field in the Natuna Sea will now commence with project sanction expected later this year and first gas planned for 2010.

North Sumatra Block A (Premier 41.67% interest)

The operator of North Sumatra Block A, PT Medco E&P Malaka (MEDCO) and PT Pupuk Iskandar Muda (PIM) signed a Gas Sales and Purchase Agreement (GSPA) in Jakarta, on Monday, December 10th, 2007. The GSPA will govern the sale of gas from the Alur Rambong, Julu Rayeu, and Alur Siwah fields in North Sumatra Block A to the PIM fertilizer plants on the northern Aceh coast. A field development plan has been submitted to BPMigas for approval.

FEED studies are planned to commence shortly, with an EPC contract award expected in late 2008.

Development wells on Alur Rambong and Alur Siwah will be drilled in 2009, with first gas expected in 2010.

A 2009 campaign in North Sumatra Block A is also being planned

Tuna and Buton Blocks

A significant seismic programme is planned for 2008 in order to identify and define prospects for drilling in 2009 and beyond. In Indonesia, 2D seismic will be acquired over the Tuna (Premier Operator, 65% interest) and Buton (Premier 30% interest) Blocks. High impact wells on the Tuna and Buton blocks are being planned for 2009.(end of excerpt)