Aabar reduces its holding in Indonesia concession to 42.5%

Abu Dhabi: Aabar Petroleum Investments Co (Aabar) announced yesterday that its wholly-owned subsidiary PearlOil has entered into a farm-in arrangement with AWE to reduce its stake in the Bulu Production Sharing Contract offshore East Java, Indonesia to 42.5 per cent.

Once the transaction is approved by relevant authorities, Aabar's interest in the Bulu PSC will fall to 42.5 per cent from 85 per cent and Aabar will remain as operator of the Bulu PSC.

PT Satria Energindo holds the remaining 15 per cent participating interest in the Bulu with 10 per cent and PT Satria Wijaya Kusuma with five per cent, Aabar said in a statement.

Under the terms of the transaction, AWE will be responsible for the drilling costs for the first two exploration wells in the Bulu contract area, up to a maximum of $12 million.

The drilling is expected to commence in the third quarter of 2007. The Bulu PSC covers 3,495 square kilometres and is located off the northeast coast of East Java in the East Java Sea.

"This transaction continues our strategy of securing partners at the exploration stage of a project to fund the drilling programme in return for an interest in the block. This is how we mitigate risk to Aabar's shareholders," said Chris Gibson-Robinson, Aabar's vice-president of operations and new business development for Southeast Asia.