Sound fails to farm-out C. Kalimantan exploration block
Sunday, June 28 2009 - 11:39 PM WIB
??the ensuing 12 months have been the most commercially difficult for many years with falling oil prices, the lack of debt funding and cutbacks in the budgets of many potential farminees and purchasers. Although many companies were technically attracted to Bangkanai, none have yet committed financially, although we are still in discussions to achieve this end,? Chairman Gerry Orbell said last week.
The company has 35 percent interest with operator Elnusa having 51 percent stake.
Development of Karendan gas field in Bangkanai has been slower than expected due to the complexity of getting the Kerendan gas to market, he said. State electricity firm PLN, which will be the offtaker of Karendan gas is faced by difficulties to install the necessary transmission link to export the power from Kerendan to the existing grid connection at Tanjung.
Formal negotiations on a Gas Sales and Purchase Agreement began with PLN in November 2008. Assuming a successful conclusion to these negotiations, it is now estimated that first gas could be delivered by 2011, he said.
Bangkanai is estimated to have proved resources of 187 BCF and proved and probable resources of 238 BCF.
According to Sound, Elnusa is seeking a further extension of the PSC First Exploration Period to 31 December 2009 in order to fulfill the outstanding work commitment of two exploration wells.
?No work program and budget has been agreed by the partners of the Bangkanai PSC. Up to date, the operator has not yet started any of the activities and management consider it highly unlikely that committed spend of US$11.75 million on the PSC will be completed in the 12 month period to 30 June 2010,? the company said.
?In the event that the obligated work programme is not completed by the end of the year, the Operator may advise relinquishment. In this case, we estimate our financial liability will be $4 million,? Orbell said. (alex)