Sonoro Energy executes Selat Panjang PSC with Indonesia

Sonoro Energy’s wholly owned subsidiary Zamatra Bakau Straits, along with its Indonesian partner, has executed the Selat Panjang production sharing contract (PSC) with the Indonesian Ministry of Energy.

Located in Riau province, Central Sumatra, the 940km² Selat Panjang PSC is 120km south-west of Singapore.

Sonoro said that a 50,000bpd refinery is located 65km to the north of the block in Sumatra.

The PSC acreage is geologically situated within a very prolific hydrocarbon basin, surrounded by various major PSCs that produce more than 45% of Indonesia’s current oil production.

With a 20-year term, the Selat Panjang PSC has a signature bonus of $5m and a five-year work programme commitment of $74m.

The PSC is structured with variable incentives making the gross split terms and conditions attractive for the consortium partners.

Sonoro Energy Indonesia general manager Bill Marpe said: “We are extremely pleased to have finalised the terms of the Selat Panjang PSC with the government. Selat Panjang offers excellent opportunities for contributing to the oil and gas production in Indonesia.

“We are grateful to MIGAS and the Ministry of Energy and Mineral Resources for allowing us the opportunity to develop the project with a pre-approved plan of development for all four existing fields.

“The potential for meaningful hydrocarbon production is very good and the block is located close to infrastructure and markets that we can capitalise on.”

As part of the execution of the PSC, Sonoro holds a 25% interest in the PSC with an option to acquire an additional 24% after completion of project milestones. The company will serve as the operator of the project.