Santos announced the acquisition of a 50% interest in the Northwest Natuna Production Sharing Contract (PSC) in the South China Sea offshore Indonesia from AWE Ltd. The NW Natuna PSC contains the undeveloped Ande Ande Lumut oil field, which has been independently assessed to contain an estimated gross proved and probable (2P) reserves of about 100 million bo.
Santos vice president Asia Pacific Martyn Eames says the acquisition is consistent with Santos’ strategy of focused growth in its core countries in Asia: “Ande Ande Lumut is a near term oil development project located in Indonesia, a country where Santos has a long track record, deep experience, and demonstrated capability.”
“Our Jakarta-based team has successfully delivered three offshore developments in recent years: Maleo, Oyong, and Wortel, and is presently working on a fourth at Peluang. Santos also has considerable experience in developing and operating FPSO-based oil projects, most recently with the successful Fletcher Finucane development in Australia, which was delivered ahead of schedule and under budget. We are pleased to partner with AWE, which has made good progress in maturing the Ande Ande Lumut opportunity since acquiring a 100% interest in the PSC in early 2012,” says Mr Eames.
The Ande Ande Lumut oil field was discovered in April 2000 and two subsequent appraisal wells were drilled in 2006. The proposed development plan contemplates the installation of a wellhead platform and a permanently-moored FPSO, with oil offtake via shuttle tankers. A final investment decision to develop the field is expected in 2014.
Key terms of the acquisition are:
The acquisition is subject to Indonesian regulatory approval of the transfer of a 50% interest in the PSC and operatorship from AWE to Santos. Under the PSC terms, an Indonesian national company (INC) is able to acquire a 10% undivided interest in the PSC. If an INC elects to participate in the PSC, Santos’ and AWE’s interests will reduce pro-rata.
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