The production sharing contract with Jakarta and state-owned PT Pertamina Hulu Energy will give Posco International the rights to explore the Bunga gas block off the eastern Java Island for a period of six years and develop and produce oil and gas in the field for 30 years, the South Korean company said. — Reuters
SEOUL: Posco International Corp says it signed a contract with the Indonesian government and its state oil company to search for and extract oil and gas in the South-East Asian country, as it bolsters the push for energy and resource development.
The production sharing contract with Jakarta and state-owned PT Pertamina Hulu Energy (PHE) will give Posco International the rights to explore the Bunga gas block off the eastern Java Island for a period of six years and develop and produce oil and gas in the field for 30 years, the South Korean company said in a release.
A production sharing contract is an agreement between a government and one or more natural resources companies on specifying the percentage of the extracted resources each party will get after the participating companies recover the costs and expenses.
The sharing ratio for the Bunga project is set at 60:40 for oil and 55:44 for gas between the Indonesian government and the two companies.
Posco International and PHE each hold a 50:50 stake in the project.
The Bunga gas block, with a depth of 50m from the shallow sea to the deep sea of 500m, covers 8,500 sq kilometres, about 14 times the size of Seoul.
Posco International said in a statement that it is estimated to have some 1.3 billion barrels of natural gas reserves, citing a Reuters report.
Posco International, a unit of South Korean steel giant Posco, operates gas fields in Myanmar and Australia.
It has been carrying out another gas exploration project in Malaysia since 2021. — The Korea Herald/ANN
