Mubadala Petroleum farms out 20 per cent stake in two Indonesian concessions

The deal will leave the Abu Dhabi energy firm as one of the largest operators in the unexplored North Sumatra basin

FILE PHOTO: An offshore oil platform is seen in Huntington Beach, California September 28, 2014. Brent oil prices fell more than $2 a barrel to less than $88 on Monday, its lowest since 2010, after key Middle East producers signalled they would keep output high even if that meant lower prices. Brent oil prices have tanked by nearly 25 percent since June as ample supply coincided with weak demand, raising the possibility that the Organization of the Petroleum Exporting countries could cut output. Picture taken September 28, 2014. REUTERS/Lucy Nicholson/File Photo

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Jul 18, 2019

Mubadala Petroleum signed an agreement with British energy firm Premier Oil for a 20 per cent stake in two Indonesian offshore concessions.

The company, a unit of Abu Dhabi’s strategic investment firm Mubadala Investment Company will have an 80 per cent interest in both Andaman I and South Andaman on the basis of gross split production sharing contracting, leaving Mubadala as the largest operator of both concessions. The value of the deal was not disclosed.

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"With this farmout, Mubadala Petroleum will extend its partnership with Premier Oil for the exploration of the Andaman blocks offshore Aceh,” Mubadala Petroleum chief executive Bakheet Al Katheeri said in a statement.

"Both partners have a strong commitment to this new high impact growth area which supports Mubadala Petroleum’s growth strategy of finding and, if successful, developing gas for Indonesia’s growing markets,” he added.

The North Sumatra basin area, where both concessions lie is a relatively unexplored but tectonically active area off the coast of Indonesia. The acquisition makes Mubadala, which also has a 30 per cent stake in the Andaman II concession, operated by Premier Oil, as the largest net acreage holder in the area.

Completion of the deal is subject to customary conditions including government approvals, Mubadala Petroleum said in its statement.

Mubadala Petroleum has been on the hunt for up and coming concessions areas with prospects for future growth such as the Eastern Mediterranean.

Last year, the company agreed to acquire a minority stake from Eni’s share in Egypt’s Nour North Sinai Offshore Area concession, which the Italian energy company operates through its subsidiary IEOC.

Mubadala has been active in hydrocarbons exploration in North Africa’s biggest economy following another acquisition in June 2018 of a 10 per cent participating interest in the Shorouk concession from Eni, which contains the massive Zohr gas field.