Pertamina,Statoil to invest $75 million on Karama block

Statoil and Pertamina (Persero) have won an award for the Karama deepwater block in the Makassar Strait offshore Indonesia.

Offshore staff

JAKARTA, Indonesia -- Statoil and Pertamina (Persero) have won an award for the Karama deepwater block in the Makassar Strait offshore Indonesia.

The companies signed a memorandum of understanding in September 2006. The production sharing contract on the Karama block is the first joint project to be undertaken following the MoU.

"We are pleased by this announcement, which will further develop the partnership between Pertamina and Statoil," says Peter Mellbye, executive vice president of international exploration and production at Statoil.

"The award is a key step for Statoil to build an upstream position in Southeast Asia and fits our global exploration strategy well," Mellbye says. "The operatorship of the Karama block is a great opportunity to transfer and share Statoil's strong technological capabilities that have been developed through operations on the Norwegian continental shelf and internationally over the past 30 years."

The winning bid comprises a signature bonus of $5 million and an obligation in the first three years to gather 1,900 sq km (734 sq mi) of 3D seismic data and to drill three exploration wells.

Pertamina and Statoil have budgeted $75 million to explore the block.

Tri Siwindono, Pertamina's deputy director of upstream development, says Pertamina and Statoil will jointly operate the block, which holds potential reserves of 200 MMboe.

The Karama block is adjacent to and south of the Kuma block, off the west coast of Sulawesi, in which Statoil was awarded a 40% share in mid-January.

Statoil holds 51% interest in the Karama block, which covers 4,286 sq km (1,655 sq mi) in water depths of 800-2,200 m (2,625-7,218 ft). Pertamina holds the remaining 49%.

3/5/2007

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