This is Santos' first operated offshore oil and gas development in Indonesia.
The Oyong field is located in the Sampang Production Sharing Contract area, offshore East Java, Indonesia.
The Oyong field was discovered in August 2001 and is estimated to contain in excess of 8 million barrels of recoverable oil and 130 billion cubic feet of recoverable gas.
Mr. John Ellice-Flint, Santos' Managing Director, said the joint venture would develop the field in two phases.
"Phase 1, an early oil development, will proceed immediately with the planned first oil production from around 8 million barrels of 2P recoverable reserves, commencing late in 2005," Mr. Ellice-Flint said.
"Phase 2 will be a gas development from around 130 BCF of 2P reserves, and we expect first gas production by the end of 2006 or early in 2007," he said.
"Santos is pleased to add its first Indonesian operated production to support the Brantas and Kakap production acquired last year.
"Oil production from Oyong comes at a time of high oil prices and adds to the Company's improving production.
"Importantly, Oyong gives Santos another operated development and builds our interests in Indonesia."
Mr. Ellice-Flint said the project was expected to bring a significant economic benefit to the East Java community, displacing imported diesel as a fuel for power generation.
"Significantly, the rapid development timetable to achieve greater value for the joint venture could not have been reached without the strong support from the Indonesian government regulator, BPMIGAS, the Ministry of Energy and Mineral Resources and the commitment of Santos and its joint venturers.
Santos Limited's participation is through its wholly-owned subsidiary Santos (Sampang) Pty Ltd, in joint venture with Coastal Indonesia Sampang Ltd and Cue (Sampang) Pty Ltd.
Interests in the Oyong field are Santos as operator with 45%; Coastal Indonesia with 40% and Cue with the remaining 15%.
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