The Kutei Basin is a prolific hydrocarbon province with approximately four billion barrels of oil and 40 trillion cubic feet of gas discovered to date. The Donggala PSC covers an area of 3,821 square kilometres and is located in the North Eastern Kutei Basin, offshore East Kalimantan in water ranging from 1650 to 2450 metres deep.
Under the agreement, Santos’ wholly owned subsidiary, Santos (Donggala) Pty Ltd (Santos), will take up a total equity interest of 65.45% in the Donggala PSC. Santos plans to farm-out up to half its new equity interest subject to further agreements with existing PSC participants.
All transactions are subject to the approval of the Indonesian regulatory authority BPMIGAS.
Once the transfer is approved by the authorities, Unocal, an existing PSC participant, will take over from Total as operator of the PSC from Total. Then after 31 December 2005 Santos will become the operator.
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 PSC was originally awarded to Total and Inpex in November 2001. Unocal and Pertamina farmed-in to the PSC after the initial award.
The Donggala PSC lies between the Popodi and Papalang PSCs. Santos acquired a 20%, non-operating interest 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.
“Santos is pleased to build on its relationships with Unocal and Pertamina and is looking forward to being part of an active joint venture in exploring this frontier trend.
“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.”
Interests in the Donggala PSC are currently: Total Donggala (operator) 32.725%, Inpex North Makassar, Ltd 32.725%, Unocal Donggala Ltd 19.55% and PT Pertamina (Persero) 15%. After the buy-in Totla and Inpex will no longer have any equity while Santos will have a 65.45% stake. Unocal’s and PT Pertamina’s interests will be unchanged.
