Kulim makes foray into O&G exploration

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PETALING JAYA: Kulim (Malaysia) Bhd is making foray into oil and gas (O&G) exploration in Sumatera, Indonesia, via a joint venture (JV) with two Indonesian companies. In a filing with Bursa Malaysia yesterday, Kulim said its unit Kulim Energy Nusantara Sdn Bhd had signed a joint operating agreement last Friday, with PT Graha Sumber Berkah (GSB) and PT Radiant Bukit Barisan E&P (RBB) to explore and develop O&G fields in South-West Bukit Barisan Block, Central Sumatera.

The total cost for exploration activities from 2015 to 2018 is estimated at RM175.7 million.

The filing said RBB is to act as the main operator for the project, while GSB and Kulim Energy will act as co-operators.

“Under the agreement, the co-operators are obliged to provide support to the operator to perform its obligations under the South-West Bukit Barisan Production Sharing Contract, which was entered into on Nov 13, 2008, between RBB, PC (SKR) International Ltd (SKR) and Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak & Gas Bumi,” said Kulim.

Kulim said it will fund its commitment under the agreement, using internal funds. RBB must undertake the ongoing work programme, geological and geophysical study, seismic study and exploration of existing or new wells in the area.

In return for its support, Kulim Energy is entitled to 60% of the net profit gained from the project, while the remaining cache will be shared among the other parties, subject to the agreement and prevailing applicable tax.

According to the filing, the Indonesian government awarded the contract to RBB and SKR on Nov 13, 2008, for a period of 30 years. Under the contract, RBB and SKR have participating interests of 51% and 49% respectively.

 

This article first appeared in The Edge Financial Daily, on October 28, 2014.