Monday, January 31, 2011

#Flash* SapuraCrest, Kencana get 50% of US$800m Berantai project

KUALA LUMPUR: SAPURACREST PETROLEUM BHD [], KENCANA PETROLEUM BHD [] and Petrofac Ltd Group have secured a contract from Petroliam Nasional Bhd for an oil and gas project with an estimated development cost of US$800 million (RM1.96 billion)

The companies said on Monday, Jan 31 the project involved the Berantai oil and gas field, about 150km off Terengganu.

Under the joint operating agreement (JOA) with Petronas, Sapura Energy and Kencana Energy will have 25% interest each while PED will hold a 50% stake.

SapuraCrest and Kencana said that based on the estimated development cost was US$800 million, their subsidiaries' respective contributions to the development was US$200 million each.

'This amount is expected to be funded by Sapura Energy Ventures by a combination of internal funds and external borrowings,' said SapuraCrest.

SapuraCrest and Kencana said their units, Sapura Energy Ventures Sdn Bhd and Kencana Energy Sdn Bhd along with Petrofac Energy Developments Sdn Bhd (PED) had entered into a risk service contract (RSC) and a joint operating agreement (JOA) with Petronas.

Under the RSC, the parties would be jointly responsible to provide a field development plan and to execute and complete the field development plan including the funding for the cost of development and to carry out production of petroleum resources from the Berantai field.

Under the JOA, Sapura Energy and Kencana Energy will have 25% interest each while PED will hold a 50% stake.

Kencana said its unit would finance the project via internal funds, borrowings and proceeds from equity/debt fund raising exercise.

The development of the Berantai field will involve the provision of one well-head platform with 18 wells together with related pipeline linking it to another existing platform and the provision of a floating production, storage and off-loading vessel (FPSO).

A second well-head platform is also expected to be installed in a subsequent phase.

The RSC will be for nine years, commencing from Jan 31, 2011. The project is targeting first gas by end of December 2011 with the first development phase of 18 wells expected to be completed before end of 2012.

Under the JOA, PED is the lead operator and the operating team undertaking the project shall comprise personnel from each of the operating parties.

SapuraCrest said it Sapura Energy was expected to undertake the offshore transportation and installation portion of the works required under the project, while Kencana said its unit would undertake the engineering, procurement CONSTRUCTION [] and commissioning of the well-head platform and related services.


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