Total, through its subsidiary, Total E&P North Bali I, will take a 39.9% interest with the right, subject to certain conditions, to obtain a further 10.1% interest in the PSC.

MOECO, through its subsidiary, Moeco North Bali Co Ltd, will take a 20% interest.

Santos was originally awarded a 100% interest in the PSC in October 2003 by the Indonesian Government.

The block is located in the offshore East Java Basin, 210km east of Surabaya and 10km north of Bali Island in water depths ranging from 100 to 970m.

The East Java Basin is considered highly prospective for oil, and several substantial oil and gas fields have been discovered within the vicinity.

Santos has already acquired two-dimensional seismic within the exploration block and an exploration well, Agung-1, is scheduled to be drilled by October 2004.

It will retain operatorship during the exploration phase of the PSC. Total will take over the operatorship after the first three-year exploration period where Total’s experience will assist Santos in enhancing its offshore development skills for deepwater operations.

Santos’ managing director, John Ellice-Flint, said that the farmout is a further realisation of Santos’ portfolio management strategy to share exploration risk and bring in credible co-venturers that provide opportunity for further deals.

“Santos is pleased to join forces with highly respected groups such as Total and MOECO,” said Ellice-Flint.

The Total/MOECO agreement follows joint venture exploration agreements reached last month by Santos with two other global oil and gas giants – Devon Energy Corporation and ConocoPhillips.

Santos has joined Devon in a joint eight-well exploration venture over three years in the Gulf of Suez, Egypt, and has also teamed up with ConocoPhillips to explore a major Timor Sea gas prospect.

Interests in North Bali I PSC will be Santos (Nth Bali I) 40.1% (decreasing subsequently to 30%), Total E&P North Bali I 39.9% (increasing subsequently to 50%) and Moeco North Bali Co Ltd 20%.