Ranhill Awarded PSC for Batu Gajah Block in South Sumatra
Ranhill Jambi Inc. Pte Ltd, a wholly-owned subsidiary of Ranhill Jambi Inc. Holdings Pte Ltd, which in turn is a 80% subsidiary of Ranhill Energy Sdn Bhd, a wholly-owned subsidiary of Ranhill Berhad, has received a letter of award from Direktorat Jenderal Minyak Dan Gas Bumi ("MIGAS"), Indonesia's executive agency for upstream oil & gas business activities, for the Batu Gajah Production Sharing Contract.
RJIH is a joint venture company between RESB and Bumi Parahyangan Energi Pte Ltd, a wholly-owned subsidiary of PT Bumi Parahyangan Energi, which holds the remaining 20% equity interest in RJIH.
The Batu Gajah Project PSC is located in an established oil and gas production region in South Sumatra. The block consists of 4 areas - West, East, Betara and Sogo Areas. Seven prospects and leads have been identified during the study conducted by MIGAS and RESB with mean prospective resources of 195mmboe. There are existing oil and gas pipeline infrastructure in the area enhancing the economics of developing small and marginal oil and gas fields.
The Project is to be carried out on a PSC basis with Badan Perlaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi ("BP MIGAS"). At this point of time, the PSC has yet to be executed.
RJIPL, in conjunction with MIGAS conducted a joint study on the hydrocarbon potential of the Batu Gajah block in accordance with MIGAS regulations decree 040, June 15, 2006.
The oil and gas exploration business involves an inherent level of risk which is unavoidable. The Joint Study area was selected consistent with RESB's business development strategy to focus and participate in low to medium risk projects in targeted markets in Indonesia and South East Asia.
There is sufficient existing seismic and prospects to facilitate exploration drilling in the 4th quarter of 2007 in accordance with the PSC work program commitment.
The estimated total capital and investment outlay for this venture is within the region of US $30 million for 3 years.
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