Santos to gain operatorship in Donggala PSC

Australian oil and gas firm Santos Limited announced Friday it had entered into agreements with French oil giant Total and INPEX of Japan in a bid to buy both companies? entire working interests in Donggala PSC, offshore East Kalimantan.

?Under the agreement, Santos will take up a total equity interest of 65.45 percent in the PSC. Subject to further agreements with existing PSC participants Santos plans to farm-out up to half its new equity interest,? Santos said in a statement to the Australian Stock Exchange.

Santos said Unocal, an existing PSC participant, will take over as operator of the PSC from Total, the current operator. However, after December 31, 2005 Santos will become operator of the PSC.

?Santos will assume its equity share of the PSC?s future work program commitment including up to five wells over the next three contract years,? the company said.

The Donggala PSC covers an area of 3,821 km2 and is located in the North Eastern Kutei Basin in water depths ranging from 1,650 to 2,450 meters.

The Donggala PSC lies between the Popodi and Papalang PSC?s. Santos acquired a 20 percent, non-operating interests in these PSC?s in May 2003.

?The addition of the Donggala PSC to our existing exploration acreage gives Santos a particularly strong presence in the Kutei Basin and adds to our growing Indonesian portfolio,? said Santos? Managing Director John Ellice Flint.

According to Santos, the Kutei Basin is prolific hydrocarbon province with approximately four billion barrels of oil and 40 trillion cubic feet of gas discovered today.

?The Donggala PSC contains several prospects and the first well with the new joint venture is planned for early to mid 2005. Santos plans to participate in at least four wells in the Kutei basin during 2005,? Santos added.

Currently, participants in Donggala PSC are: operator Total (32.72 percent), INPEX (32.72 percent), Unocal Corp. (19.55 percent) and Pertamina (15 percent). (Robert)