Santos Acquires Stake in Bawean PSC Offshore Indonesia

Santos has expanded its exploration interests in Indonesia by acquiring a 45% interest in the Bawean 1 Production Sharing Contract area (PSC) located offshore East Java. Santos has agreed to acquire the interest from BP Indonesia, which was awarded the PSC in November 2001. BP will retain a 55% interest in the acreage and remain as operator.

The Bawean 1 PSC covers an area of 9,559 km2 and its addition to Santos' portfolio more than doubles the area of Santos' Indonesian exploration acreage.

Santos will fund elements of the PSC work program including two wells scheduled to be drilled within the second quarter of 2003. Drilling is scheduled to commence on the first well, Titan-1, targeting a gas prospect, in April 2003.

“The addition of the Bawean PSC interests is another significant step in building our Indonesian business and, importantly, adds to the "high-impact" end of our exploration portfolio," said Santos Managing Director, Mr. John Ellice-Flint.

"3D seismic data was acquired over part of the PSC during 2002 so any discoveries could be appraised and developed quickly to help meet the escalating demand for gas in East Java," he said.

"Santos has a good understanding of both the geology and the gas market in the East Java region. We look forward to working side-by-side with BP – one of the world’s most successful exploration and production companies."

Completion of the acquisition is subject to Indonesian regulatory consents.

Interest holders in the Bawean 1 PSC are BP as operator with 55% and Santos holds the remaining 45%.