RIMS Transfers Interest in Karapan Block To Petronas

RIMS Energy Karapan Ltd, the existing operator and Production Sharing Contractor of the Karapan Exploration Block, offshore East Java, has transferred a 50 percent working interest in the Karapan PSC to Petronas Carigali Overseas Sdn Bhd. REKL and PCOSB will jointly operate the block through a newly-formed, equally-owned Joint Operating Company, pending the approval of Directorate General of Oil & Gas, Indonesia (MIGAS) and Pertamina.

The Karapan Block covers an area of 2,839 sq km and is located adjacent to the Ketapang Block, offshore East Java where significant oil and gas has recently been discovered. It also possesses the same geological features of the Ketapang Block, in which PCOSB has a 50 percent working interest.

"We expect to commercialize the Block before 2004 and aim to become a significant oil and gas producer in East Java by 2005," said Dixie Bastian, REKL President and Chief Executive Officer (CEO). "Any economic gas discovery in Karapan would be easily developed and absorbed by the growing market in East Java," Dixie added. "Thus far, we have identified nine drillable prospects in Karapan with recoverable potential of 680 million barrels of oil and 2.5 trillion cubic feet of gas with 50 percent success probability," said Dixie. The JOC plans to drill three exploration wells in Karapan beginning June 2002 and at least one well in 2003.

The Karapan Block has been proven by earlier operator Cities Service, which drilled JS 14 A-1 well in 1975, flowing 520 barrels of oil per day and 25 million standard cubic feet per day (mmscfd) of gas.