Gulf Resources to Supply Petronas with Natural Gas

Gulf Resources (Grissik) Ltd., a wholly owned, indirect subsidiary of Conoco Inc. has signed a Memorandum of Understanding for the supply of natural gas from the Indonesian island of Sumatra to Malaysia.

The parties to the MOU are Pertamina and Petronas. Approximately 73 percent of the natural gas required by Petronas will be supplied from the Corridor Block Production Sharing Contract (PSC) operated by Gulf Resources (Grissik) Ltd., with the remainder supplied from PSCs operated by other entities. The natural gas sales agreement is scheduled to be complete before the end of 2002, with first gas deliveries targeted for April 2005. Gas deliveries are expected to plateau at 300 billion btu's per day.

"This is a major step in the development of the Suban field, which will be the Corridor Block's primary supply source for the agreement. Approximately $150 million will be invested to develop new field facilities in the Corridor Block PSC. This announcement follows the signing of a MOU to sell gas to Batam in April this year and we hope to conclude one further major sale by year-end to the domestic market," said Andrew Hastings, vice president, Gas Marketing and Business Development, Gulf Indonesia.

Gulf Resources (Grissik) Ltd. holds a 54-percent working interest in the Corridor Block PSC and is contract operator for Pertamina. Other partners are Talisman (Corridor) Ltd. (36 percent) and Pertamina (10 percent).