Indonesia

The Group is the operator of two producing upstream assets, the Kepala Burung PSC and the Salawati PSC, which are two contiguous blocks located in the 'Birds Head' area of West Papua, Indonesia. Kepala Burung PSC covers an onshore area of 1,030 km², while Salawati PSC covers an area of 1,137 km² which straddles both onshore and offshore acreages. Both blocks lie within the Salawati Basin, which is one of the most prolific petroleum basins in Indonesia.

Kepala Burung PSC

The Group is the operator and holds a 70% working interest in the Kepala Burung PSC. The remaining 30% working interest is held by Pertamina, Indonesia's state-owned oil and gas company. After accounting for non-controlling interests, the Group's effective working interest in the Kepala Burung PSC is 57.8578%.

The Kepala Burung PSC commenced in October 2020 immediately upon the expiry of the previous PSC which bears the same PSC name and covers essentially the same contract area. The Group had an aggregate of 60% working interest in and was operator of the expired PSC. The Group's continued participation and operatorship in the Kepala Burung PSC allows the Group to leverage on its in-depth knowledge and experience in the block to pursue various strategies and programs to grow its reserves and production.

Given the fresh 20-year term under the new PSC, the Group is well positioned to review and implement longer term initiatives to increase production from existing fields, such as through in-fill development drillings, EOR and other production optimisation plans. More importantly, the Group will be able to refocus its efforts on the large inventory of exploration prospects and leads that remain within the block. Any exploration success has the potential to tie-back to existing infrastructure and move into development and production quickly.

Drilling activity in the block began in 1972 which resulted in 20 oil and gas discoveries from the Miocene aged Kais Formation, a fractured carbonate with strong aquifer support. To date, cumulative production from the block has exceeded 360 million barrels of oil and 270 billion cubic feet of gas. Currently, the Kepala Burung PSC produces from 18 active oil and gas fields, with the largest contributor being the Walio oil field which accounts for more than 50% of the block's oil production. In recent years, production level has remained relatively steady through an on-going program of well optimisation and workovers, supplemented by near field exploration discoveries and in-fill development drillings.

The Kepala Burung PSC operates the Kasim Marine Terminal ("KMT") located within the contract area, where crude oil produced is treated and stored before it is lifted by the respective PSC partners. KMT has the pipeline facilities to deliver crude oil from its storage tanks to the adjacent refinery owned by Pertamina, as well as loading pier and facilities for loading crude oil onto tankers for both the domestic and export markets. Besides being used for the Kepala Burung PSC's own production, KMT also provides third-party storage and throughput for oil produced from nearby blocks. Crude oils from the various blocks are co-mingled and sold as Walio Mix crude blend.

Apart from crude oil, the Kepala Burung block also produces natural gas and liquefied petroleum gas. Part of the natural gas produced is used for internal power generation to meet its operational needs, while the rest is sold mainly to a local government-owned entity which supplies gas to Sorong city, the largest city in the West Papua province, to meet the city's electricity needs. This aligns with the Indonesian government's "Bright Papua" programme and is part of an ongoing effort to improve the development of the eastern part of Indonesia, especially in the Sorong area.

Salawati PSC

The Group is the operator and holds a 70% working interest in the Salawati PSC, with the remaining 30% working interest held by Pertamina. After accounting for non-controlling interests, the Group's effective working interest in the Kepala Burung PSC is 57.8578%.

The Salawati PSC commenced in April 2020 immediately upon the expiry of the previous Salawati Kepala Burung PSC, which covered essentially the same contract area. The Group had an aggregate non-operated working interest of 33.2142% in the expired PSC.

Similar to the Kepala Burung PSC, the Salawati block produces from the Miocene aged carbonates. Oil produced from its onshore fields is barged to KMT where it is mingled and stored with oil production from Kepala Burung and other fields and sold as Walio Mix crude blend. As operator of both the Kepala Burung PSC and Salawati PSC, the Group is well positioned to optimise and extract operational and cost synergies between the two adjoining blocks. In this respect, the Group will continue to facilitate and enhance the sharing of resources such as manpower, facilities, rigs, transportation and logistics between the two blocks where possible.

There remain a number of undeveloped discoveries and drill ready prospects in the Salawati block, especially in the offshore areas, which offer significant growth potential for the Group.