Husky Energy reaches agreement with CNOOC over Indonesia field

Jakarta, Indonesia | May 21, 2008 by D-8 Secretariat

Calgary-based Husky Energy has reached an agreement with China National Offshore Oil Corporation, to jointly develop the Madura BD gas and natural gas liquids field, located offshore East Java, Indonesia.

The agreement covers the development and further exploration of the Madura Straits production sharing contract (PSC). Under this transaction, China National Offshore Oil Corporation (CNOOC) will pay $125 million to Husky for a 50% equity interest in Husky Oil Madura, which holds a 100% interest in the field.

Husky holds a 100% interest in the East Bawean-II PSC, offshore Indonesia and will continue to focus on exploration and drilling activities in Indonesia. Husky has completed a 1,410sqkm 3D seismic program over this block in preparation for a two-well exploration program in 2009.

The Madura Strait PSC is located approximately 40km north of East Java and covers 2,794sqkm of exploration acreage. In 2007, Husky signed three gas sale and purchase agreements for the sale of 100 million cubic feet per day of natural gas from the Madura BD field to East Java buyers.

John Lau, president and CEO of Husky Energy, said: “CNOOC brings extensive experience and strong technical skills in operating offshore Indonesia. We are pleased to team up with a strong partner to ensure that the development of the Madura BD field proceeds expeditiously and efficiently.”

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