Indonesian Oil & Gas Book 2008

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Natuna Sea Block A PSC

Chevron's subsidiary Amoseas Indonesia Ltd became the operator after Sumatra Gulf Oil Ltd. Amoseas installed Anoa Natuna FPSO (floating production storage and offloading) and commenced oil production from the field in April 1990.

Fact SheetType of Contract : PSCLocation : West Natuna Sea (Offshore), Riau IslandsArea : 5,000 sq kmOperation Status : ProductionOperator : Premier Oil Natuna Sea BVContract Signing : October 16, 1979End of Contract : October 16, 2009 (extend) Participants : Premier Oil (28.67%) Kufpec (33.33%) Hess Corporation (23%) Petronas (15%)

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In 1996, Premier Oil took over the operatorship after acquiring Amoseas' interest in the block. Premier's main focus was the commercialization of the gas reserves in the block.

Following the signing in early 1999 of a gas sales agreement to supply gas from West Natuna area to Singapore, Premier and its partners in the West Natuna Consortium started developing their combined gas reserves of 2.5 trillion cubic feet.

The West Natuna Consortium commenced sales of gas to Singapore's SembCorp Gas from Anoa platform in January 2001. Gas production equipment was installed on the Anoa platform to facilitate early deliveries. Deliveries were later made from the Anoa gas export (AGX) platform which was successfully brought onstream in June, ahead of the gas contract delivery date of July 15, 2001.

Overview

The Natuna Sea Block A PSC is located in the Natuna Sea, covering an area of 5,000 sq km with water depths of between 250 and 350 feet. It is about 1,100 km north of Jakarta. Geologically, it is part of the West Natuna Basin.

Agip Indonesia Ltd was the first operator of the block. Agip found first indication of potentially commercial hydrocarbons in the block in 1974 at the AQ-1X well, which due to poor seismic trap definition clipped the edge of what subsequently known as Anoa field. In the mid 1970's, Agip relinquished its interest in Block A and Sumatra Gulf Oil Ltd took operatorship and developed the Anoa field.

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Working Areas

Production

Currently, there are four production facilities in Block A, that is Anoa Natuna FPSO, Anoa platform, AGX platform and the new installed West Lobe platform.

The 2006 exploration drilling campaign resulted in a 100 percent success rate with a gas discovery in Macan Tutul-1 and the discovery and testing of oil and condensate-rich gas at Lembu Peteng-1. Further drilling of exploration and appraisal wells on the trend are planned for 2007 to establish the significance and development potential of this area as part of the drive to ensure maximum hydrocarbon extraction from the Natuna Sea Block A asset.

Serious efforts to sell more gas from the block have been conducted since few years ago with prospective buyers in Singapore and Batam Island. Target date for first gas is the end of 2010.

Oil produced from the Anoa platform uses the Anoa Natuna FPSO. The FPSO's processing capacity is 32,000 BPD of oil and 14,000 BPD of water with a 5 MMCFD ground flare capacity. The 76,200-dwt vessel has storage capacity of 550,000 barrels.

Meanwhile, sales gas from AGX platform is delivered to Singapore under a long-term contract via the 650 kilometer long 30-inch West Natuna Transportation System (WNTS). The WNTS started delivering gas to Singapore early 2001. The WNTS is owned by three PSCs:• Block B (43.1%), operated by ConocoPhillips (also WNTS

operator);

• Block A (36.9%), operated by Premier; and

• Kakap (20%), operated by Star Energy.

In 2006, the block sold an average of 30 BBTUD (gross) of gas, while oil production from Anoa averaged 2,581 BPD (gross) down from 3,023 BPD (gross) in the previous year. The decline was due to a natural depletion of oil reservoir.

Recent Development

The construction of the West Lobe platform was completed in January 2007 and the commissioning was carried out in the following month. The wellhead platform, which will be used to drill up to a maximum of 12 wells over the productive life of the field, will tie-in to the existing pipeline facilities and will be controlled remotely from the existing Anoa production complex. Currently, four wells are producing from the West Lobe platform.