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Husky gets Madura Strait PSC extension

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OilStockReport   Sunday, 10/31/10 07:39:57 PM
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Husky gets Madura Strait PSC extension

Published Oct 29, 2010

Husky Energy has received approval from the Government of Indonesia for an extension to the existing Madura Strait Production Sharing Contract (PSC), originally awarded in 1982. The Madura Strait PSC includes the Madura BD and MDA fields, as well as numerous other prospects and leads.

The Madura BD field, which contains natural gas and natural gas liquids, is located in the Madura Strait, offshore East Java, Indonesia. The government approval provides a 20-year extension to the existing production sharing contract which would have expired in 2012.

'This production sharing contract extension provides the basis for advancing the Madura BD field towards development,' said John C.S. Lau, President & Chief Executive Officer, Asia Pacific. 'The Madura BD field, together with our other discoveries offshore Indonesia and the South China Sea, represent growth opportunities to build a material oil and gas business in the region.'

Many of the requirements to bring the Madura BD field into production are in place. In 2007, Husky signed gas sales agreements with three local companies for the sale of 100 million cubic feet per day of natural gas production. In 2008, Husky reached an agreement with CNOOC to jointly develop the Madura BD field. A Plan of Development for the BD field has been approved by the Indonesian government, and front end engineering and design was completed in the second quarter of 2010.

Husky and its partner in the Madura Strait have each agreed to sell a 10 percent equity stake in Husky Oil (Madura) Ltd. to Samudra Energy Ltd., through its affiliate SMS Development Ltd. Following the completion of the sale, Husky and CNOOC will respectively hold a 40 percent equity interest in Husky Oil (Madura) Ltd., with the 20 percent balance held by Samudra Energy Ltd.

This is not an offer to buy or sell securities or any kind of investment advice. Oil investment carries very high risks so do your own due diligence before and consult a licensed professional making any decisions.
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