KrisEnergy to Exit Indonesian PSC
Singapore-headquartered KrisEnergy has accepted a binding offer for its 30% non-operated stake in the Andaman 2 production-sharing agreement (PSA) in the Malacca Strait off Indonesia, it said on October 29.
The offer came from a major international oil and gas company, KrisEnergy said in a notice on its website, and was accepted after KrisEnergy weighed up the exploration costs and risks of deepwater activities.
“The board believes it is more prudent to allocate KrisEnergy’s limited capital to funding near-term development,” the company said.
The sale is subject to Indonesian government approvals and the undertaking of due diligence by the buyer. It must be completed by a March 31 2020 deadline.
Andaman 2 lies in the North Sumatra basin, covering a 7,400-km2 area in waters 200 to 1,950 metres deep. It is operated by the UK’s Premier Oil with a 40% position, while the UAE’s Mubadala has 30%. Prior to the investors finalising a PSC last year, 1,427 km of 2D seismic data had been collected at the block.
KrisEnergy has come under strain in recent years from impairments and bearish market conditions. It suffered a pre-tax loss of $67.8mn in the first half of 2019, as result of low oil prices and production decline, noting in August it had filed for a six-month debt moratorium to seek court protection from its creditors. It is currently looking to restructure its debts, estimated at $476.8mn at the end of June.
KrisEnergy has interests in four more Indonesian PSCs and is also active in Bangladesh, Cambodia, Thailand and Vietnam.