Release: China Petrotech secures KSO in Indonesia
Thursday, April 26 2007 - 02:01 AM WIB
(Singapore, 25 April 2007) – China Petrotech Holdings Limited (CPHL) wishes to announce that the Company, together with its joint venture Indonesian partner, PT Remaja Bangun Kencana (PTR), a subsidiary of the Rabana Group, has signed a KSO agreement with Indonesia’s national oil company, Pertamina for a 20-year exploration and production rights at a gas field in Kamundan, East Indonesia.
KSO refers to an Operation Cooperation Contract (or Kerjasama Operasi), which is a form of a technical assistance contract.
The joint venture company, PT. Kamundan Energy (PTK) will have an authorized capital of US$4 million and initial paid-in capital of US$1 million. CPHL will invest S$420,000 for a 42% interest in PTK. PTR will invest US$580,000 for the remaining 58% interest.
The Kamundan Block is situated at the onshore area of Bintuni Basin, at the Bird’s Head area of Papua, East Indonesia and the contract area covers a total of 1,582 sq. km.
Based on data from LEMIGAS, the government research and technology institution operating in the upstream and downstream oil and gas business, the Kamundan block has an estimated recoverable gas reserve of 6,667 BCFG (Billion Cubic Feet Gas) equivalent to 140 million barrels of oil.
Initial 2-D seismic data acquisition has been conducted on 1,842 sq. km. area of the Kamundan Block with four exploratory wells that had been drilled with positive oil and gas shows.
Pertamina has granted the rights to PTK to develop and explore the area for a period of 20 years. Under the agreement, PTK will share up to 22% of output (after an 80% costs recovery). PTK expects to start work on the project within the next three months. Phase I of the project will involve the development of detail study of the initial 2-D seismic data from Pertamina. This will be followed by a further 3-D seismic data acquisition program and an exploration drilling program.
The area in which the Kamundan Block is located in is known for its rich oil and gas reserves. Nearby the Kamundan Block, a BP Consortium is currently constructing a US$6.5 billion LNG processing plant with an annual processing capacity of 7.4 million tons, where estimated proven reserves and unproven reserves are reported to be 14.4 TCF and 23.7 TCF respectively. These fields are said to have the potential to become the world’s premier natural gas supplies. Production from BP Consortium’s LNG Tangguh Project has been allocated for export to USA (3.7 million tons), Korea (1.1 million tons) and China (2.6 million tons).
"We are very excited about our participating interests in Indonesia’s premier Oil & Gas Project. The Kamundan project has been secured through intensive research and business development work in Indonesia in the past two years. Going forward, the group will continue to seize attractive acquisition opportunities with low risk to add value and grow our core business." said Mr. William Chan, Executive Chairman of CPHL.
Total first year project development costs are estimated to be US$2.4 million (CPHL stake is 42%). (end of release)