Lion Energy, Gulf Petroleum Terminate Indonesia Deal

Australia-listed Lion Energy has agreed to terminate the sale and purchase agreement (SPA) to acquire Gulf Petroleum Investment Company’s (GPI) 16.5% stake in the Seram Non-Bula production sharing contract (SNB PSC), located on Seram Island, Indonesia, it said September 12.  

The agreement was first announced in December last year. Post the deal, which was valued at US$44mn, Lion’s share in the PSC would have increased to 19%. Other partners in the PSC are CITIC Seram Energy (operator); Petro Indo Mandiri and GHJ Seram Indonesia.

According to the company, SNB PSC is in the process of being converted from a legacy cost recovery styled PSC to the new gross split PSC format. The new PSC comes into effect on November 1, 2019.

“The GOI [Government of Indonesia] has indicated that whilst it can approve the transfer of GPI’s interest to Lion in the current PSC contract, it believes that existing participants in the new PSC are restricted from selling more than 50% of their participating interest in the first five years, during the new PSC firm work commitment period. The parties have therefore mutually agreed to terminate the SPA,” Lion said in a statement.

Lion said it remains interested in increasing its interest in SNB to complement its 100% interest in the recently awarded adjacent East Seram PSC.