Ranhill says W. Java exploration block has 1b barrels potential

Malaysian energy firm Ranhill Berhad said its newly acquired Citarum onshore exploration block in West Java has a potential of 1 billion barrels of oil.

Ranhill, together with local partners Mitra Energia Ltd and Bumi Parahyangan Energi was awarded the block earlier this month after beating 6 other competitors including Thailand?s PTTEP. Ranhill has 60 percent interest in the block with the remaining balance equally shared by both partners.

The Citarum Block is a large block measuring 4,440 sqkm located within the Central part of West Java Province, and according to a study conducted by Pertamina and partners in September 1999, has an estimated prospective block potential of 1.04 billion barrels of oil.

The company said a recent joint study concluded that one prospect in Citarum block, called Jonggol has a prospective resource of 600 million barrels of oil (mmbo). The study also indicates a probability of success of 40% higher than the industry average of 20%.

Ranhill said initial investment during this exploration period will be in the region of USD27.5 million. Future exploration programs will target other prospects in the Block to capture the remaining resources. Citarum partnership is obliged to undertake 750 km of 2D seismic and four exploration wells. The first well is planned to be drilled in March 2006.

Ranhill's current oil and gas investment in Indonesia includes a producing gas field called Jatirarangon, which lies about 15km north of this Citarum Block. Ranhill owns 49% equity in Ellipse Energy Jatirarangon Wahana Limited (EEJW) who operates this field. This field is producing 10 mmscf/day (millions of standard cubic feet per day) of natural gas from two wells. EEJW has a Gas Sales Agreement with PT Perusahan Gas Negara ("PGN") to sell gas at USD2.55 per mmbtu. Two additional wells will be drilled later this year to increase production.(alex)