Singapore Petroleum Company Limited ("SPC") today announced that the Company has through its wholly-owned subsidiary, SPC E&P Upstream Pte Ltd ("SPC E&P Upstream"), entered into a Petroleum Production Sharing Contract ("PSC") with Badan Pelaksana Kegiatan Usaha Hulu Minyak Dan Gas Bumi ("BPMIGAS"), an Indonesian state-owned legal entity, to explore the Mahakam Hilir Block ("Block"), subject to final government approvals.
SPC will be the Operator of the Block and is committed to conduct seismic survey and exploration drilling under the PSC. The Block, covering approximately 344.14 square kilometres, is located onshore Kutai Basin in the East Kalimantan Province, which is situated approximately one kilometre south of Samarinda town. The Kutai Basin is one of the largest and most important oil and gas producing basins in Indonesia.
Commenting on the announcement, SPC Chief Executive Officer, Mr Koh Ban Heng said, "Our investment is in line with SPC's plan to grow its exploration and production business, and participate in the entire oil and gas value chain. We are pleased to expand our E&P presence in Indonesia with the operatorship of SPC's first onshore block.
"This integration of SPC's businesses will diversify SPC's earnings in the long-term and in many ways, validates our E&P growth."
SPC E&P Upstream is a Singapore incorporated company currently capitalised at S$2.
The above investment will be funded by internal resources and is not expected to have any material effect on the net tangible assets per share and earnings per share of the Company for the year ending 31 December 2008.
