HOUSTON, Jan. 18 -- CNOOC Ltd. said Friday it would buy the Repsol-YPF Group's interests in five Indonesian oil and gas properties for $585 million.
CNOOC said the acquisition would make it the largest offshore oil producer in Indonesia. The purchase covers net working interest reserves of 360 million boe held by nine Repsol subsidaries active on and offshore.
The assets include a 65.34% interest in the Southeast Sumatra production sharing contract (PSC), 36.72% of the Offshore Northwest Java PSC, 25% of the West Madura PSC, 50% of the Poleng technical assistance contract, and 16.7% of the Blora PSC.
The Chinese firm will become operator of the Southeast Sumatra PSC. BP PLC will continue to operate the Offshore Northwest Java PSC. CNOOC already held a 39.51% interest in the Malacca Strait PSC.
Separately, Chairman and CEO Wei Liucheng said CNOOC's core strategy for 2002 is unchanged.
"We will continue to focus on growing production, executing our development plan, and adding reserves through exploration. In addition, we are taking advantage of some highly attractive investment opportunities that offer our investors additional growth in production and net income."
CNOOC's target production in 2002 is 125-130 million boe and will be met primarily through development of reserves off China. Three major projects would come on stream in 2002.
The company said natural gas (including LNG) would continue to be a priority. It said, "CNOOC is in the best position to capitalize on the growing demand for natural gas in China, especially in the coastal regions."
In addition to the Indonesian purchase, 2002 capital expenditures would be about $1 billion. CNOOC will spend $650-720 million for development projects and $180-220 million for independent exploration off China.
Foreign PSC partners are expected to invest another $300 million in exploration off China, a 150% increase over 2001.
CNOOC said capital expenditures for the newly acquired Indonesian unit will be $40-50 million, 90% of which will be for development projects.
The company plans to keep production costs below $10/bbl for offshore China assets and reduce the historical costs for the Indonesian properties.
The state-owned Chinese National Offshore Oil Corp. owns 75% of CNOOC and the rest is publicly traded.
