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Abu Dhabi, UAEThursday 13 December 2018

Mubadala Petroleum signs production sharing contract for Indonesian gas field 

The pact has the potential to unlock a new gas play for domestic consumption

Mubadala Petroleum, a subsidiary of the Abu Dhabi strategic investment firm Mubadala Investment Company, has signed the production sharing contract for Andaman I in Indonesia, which was awarded by Jakarta in the 2017 licence round.

Mubadala Petroleum is the operator of Andaman I and a partner in Andaman II, operated by UK-based Premier Oil, state news agency Wam reported on Monday.

For the Andaman I exploration block, Mubadala Petroleum will conduct sub-surface studies and acquire 3D seismic surveys in the first three years.

Andaman I and II are adjacent and located in the under-explored North Sumatra basin offshore Aceh, a region where Mubadala Petroleum has been active since 2011 through joint study agreements. The production sharing contracts have the potential to unlock a new gas play for domestic consumption in North Sumatra and long-term export prospects to the regional markets.

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“The operated Andaman I production sharing contract and our interest in the Andaman II production sharing contract mark the further extension of our Indonesia portfolio with a new high impact growth hub,” said Bakheet Al Katheeri, Mubadala Petroleum’s chief executive. “These new exploration blocks support our growth strategy of finding and, if successful, developing gas for Indonesia’s growing market while it has the potential to deliver significant organic growth opportunities for our existing Indonesian business in the longer term."

Mubadala Petroleum and Petrochemicals, a unit of parent company Mubadala, is seeking lower-cost barrels of oil at home and across Asia, even as it positions itself as a strong player in the North American natural gas and chemicals industry, its chief executive Musabbeh Al Kaabi told The National last month.

Mubadala's Petroleum and Petrochemicals platform, which is part of the estimated $127bn state fund, currently values its portfolio at $40bn, with just over $8bn spent in the last year alone in a raft of upstream and downstream investments.