Santos Buys 50% Stake in Northwest Natuna PSC for $188M

Australia-based Santos Ltd. announced Thursday that it has acquired a 50 percent interest in the Northwest Natuna Production Sharing Contract (PSC) offshore Indonesia from AWE Limited for approximately $188 million (AUD 209 million).

The Northwest Natuna PSC, which contains the undeveloped Ande Ande Lumut oil field, has been independently assessed to hold estimated gross proved and probable (2P) reserves of approximately 100 million barrels of oil.

“Ande Ande Lumut is a near term oil development project located in Indonesia,” Santos Vice President Asia Pacific Martyn Eames said in a press release.

The proposed development plan for the Ande Ande Lumut field, discovered in April 2000, includes the installation of a well-head platform and a permanently moored floating, production, storage and offloading (FPSO) vessel, with oil off-take via shuttle tankers. A final investment decision (FID) to develop the field is expected in 2014.

Santos is required to make an initial payment of $100 million upon completion of the acquisition. The firm will also pay on behalf of AWE a capital up to a maximum of $88 million following the FID to develop the Ande Ande Lumut field and take over as PSC operator. The acquisition is subject to Indonesian regulatory approval.

Under the terms of the PSC, an Indonesian national company can acquire a 10 percent undivided interest in the block if it elects to participate in it and the interests of Santos and AWE will be reduced pro-rata.

“We are pleased to partner with AWE, which has made good progress in maturing the Ande Ande Lumut opportunity since acquiring a 100 percent interest in the PSC in early 2012,” Eames said.

“We look forward to working with Santos on this important development project. Santos is a valued partner in the project who brings an established Operating capability in Indonesia and a track record of successfully developing other offshore fields in the region," AWE’s Managing Director Bruce Clement said in a separate company announcement.

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