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Summary

Malaysian-Indonesian Gas Sales Negotiations

Australian oil and gas group, Santos Limited (ASX:STO, NASDAQ:STOSY) is involved in negotiations for a 20 year contract for sale of gas from Indonesia to Malaysia.

Santos said today that a Memorandum of Understanding (MOU) has been signed between the Indonesian and Malaysian State oil companies (Pertamina and Petronas), to supply gas from onshore gas fields in South Sumatra to Malaysia. The fields involved include the Bentu Production Sharing Contract (PSC) operated by the Santos Group.

Santos’ Managing Director, Mr John Ellice-Flint said today the MOU was for the first gas supplies to commence in early 2005.

“This would be Santos’ first gas sale in Indonesia”.

This MOU is a further step in the international diversification of Santos’ gas business. It is an encouraging step towards both commercialising Bentu gas and building Santos’ gas business in Indonesia”.

A Gas Sales Agreement (GSA) is expected to be concluded by the end of 2002.

The GSA will result in the supply of 300 million cubic feet per day (mmcf/d) of gas to Malaysia for 20 years. The total gas volume under the MOU is 2.19 Trillion Cubic Feet.

The Bentu PSC has been allocated a 10% share of the total volume. Santos share of gas is approximately 135 Billion Cubic Feet.

Santos Group has a 61.1% interest in the Bentu PSC. The other interest holder is Petroz Bentu LDC, controlled by US oil major Phillips Petroleum.

Download the news release here