PTTEP, Pertamina fail to acquire Indonesian offshore Pangkah block from US’ Hess

Singapore (Platts)–13 Jan 2014/1105 pm EST/405 GMT

Thailand’s PTT Exploration and Production has failed to proceed with the planned joint acquisition of a majority stake in Indonesia’s offshore Pangkah gas block with Indonesian state-owned Pertamina from US company Hess Corp, the company said late Monday.
PTTEP said the existing joint venture partner exercised its pre-emption rights and has acquired the 75% stake in Pangkah in the East Java Sea that Hess had put up for sale.

Hess had instead, sold the stake to a subsidiary of Saka Energi Indonesia for $650 million, including debt, the US company separately announced on Friday.

Saka Energi is an upstream unit of Indonesian gas distributor Perusahaan Gas Negara and had acquired its existing 25% stake in the Pangkah block from Kuwait Foreign Petroleum Exploration, or Kufpec, in June last year for $265 million.

The block has been in production since 2007 and supplies power generation customers in the area. Hess said its net production from Pangkah was 9,000 b/d of oil equivalent in the first three quarters of last year, suggesting gross output over the period was 12,000 boe/d.

PTTEP and Indonesia’s Pertamina had agreed in early December to acquire Hess’ interest in Pangkah as well as its 23% stake in the Natuna Sea A block in the West Natuna Sea for $1.3 billion, on a 50:50 basis.

PTTEP said that the transaction for Natuna Sea A was completed last month for a total $526 million in equity and $124 million in debt, giving each company an 11.5% stake in the block.

In a note on Tuesday, Credit Suisse said the failure to secure Pangkah was a setback for PTTEP, particularly for “future growth beyond 2015” as there is potential for the project to expand production in the medium term. The bank had expected Pangkah to add 7,800 boe/d of production for PTTEP this year, contributing Baht 2.2 billion ($66.7 million) in earnings.

PTTEP last week said it expects to produce 337,000 boe/d of oil and gas this year, a 15.4% increase from 2013. Its total capital expenditure is anticipated to be $5.51 billion this year. Credit Suisse said these targets did not include contributions from the Pangkah project.

–Song Yen Ling,
–Edited by Irene Tang,


About artidj

I started working as a field engineer in Oil & Gas industry back in 1996. I do this news clipping of the industry and the geography I am interested in, mainly for my own information. I'm glad you find it useful.
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