2nd Sep 2015 06:53
LONDON (Alliance News) - CEB Resources PLC Wednesday said it has agreed to assess potential oil and gas opportunities in Indonesia with oil exploration company PT Akar Golindo, including the prospect of building a power plant or selling gas to foreign markets.
"At present we are operating in a target-rich environment and fully intend to utilise our experience and in-country presence to take advantage of opportunities that have the potential to generate cash flow and enduring value for our shareholders," said CEB Managing Director David Whitby.
The investment company said it will look at potential commercial opportunities around the Tuba Obi East oil and gas concession in the South Sumatran Basin with Golindo, specifically the Tuba Obi East Technical Assistance contract, along with surrounding undeveloped gas discoveries to provide a detailed assessment of potential opportunities in the region.
CEB said the Tuba Obi East Technical Assistance contract has multiple oil and gas discoveries within the block, ongoing production and existing facilities, further exploration options, undeveloped reservoir zones and additional undeveloped gas discoveries in other blocks adjacent to the contract area.
"The signing of the Tuba Obi East study agreement is instrumental in the realisation of our long-term strategy, representing a beach head into the attractive Indonesian gas and power markets," said Whitby.
CEB and Golindo will now study the potential to develop the contract area and the opportunity to sell gas to the Singapore market and other buyers via a major transmission pipeline that lies around 12 kilometres away from the contract area, it said.
"Alternatively there is the opportunity to monetise the gas via the construction and operation of an independent power plant, selling electricity into the Sumatran power grid," it said in a statement.
"CEB sees the gas and power market in Indonesia as an opportunity that should form part of its long-term balanced asset portfolio. Importantly the gas price is independent of the oil price," it added.
The idea of building a power plant to generate electricty rather than sell the gas could benefit from the country's plan to supply an extra 35,000 megawatts of power over the next four years.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.