Cairn tells Petrobangla of its stakes sale to Santos
Wednesday, 7 November 2007
M Azizur Rahman
Cairn Energy Plc has informed the Petrobangla about the sale of its Bangladesh stakes to Australian oil and gas exploration and production company - Santos.
"Cairn has informed us about its sale of stakes to Santos recently," Petrobangla chairman Jalal Ahmed told the FE.
Santos on October 26 last announced that it had acquired various assets in Bangladesh, including a 37.5 per cent interest in the Sangu gas field and a portfolio of exploration acreage from Cairn Energy PLC.
Talking further on Cairn's sale of assets to Santos, the Petrobangla Chairman said: "The sale will be effective as per the terms and conditions of the production sharing contract (PSC) signed between the company and the Petrobangla."
According to the existing PSC, informing the news of selling stakes to Petrobangla is enough to ensure effectiveness of such deal as no prior approval from Petrobangla is required in this regard.
Petrobangla's permission is, however, necessary before selling of operation right by an international oil company (IOC) to any other IOC, as per the existing PSC provision.
With this acquisition, Santos will hold a 37.5 per cent interest in the Sangu Development Area, 37.5 per cent interest in Block 16 exploration acreage and 45 per cent interest in exploration Blocks 5 and 10.
The net average gas production from the Sangu field up to 30 September 2007 was 34 million cubic feet per day (mmcfd) and net proven and probable (2P) gas reserves acquired are approximately 34 billion cubic feet.
The portfolio provides Santos with a 37.5 per cent interest in another offshore Magnama gas exploration well.
The Cairn Energy initiated drilling in the Megnama structure on October 3, 2007 and the company drilled some 2,400 meters until October 31.
The company is expected to reach a total depth of 4,500 meters by early December 2007.
The acquisition deal was done at US$50 million. It will also include contingent payments of $20 million, payable in installments depending on future development results from the current drilling programme.
Cairn has been in Bangladesh for more than 10 years.
Cairn Energy Plc has informed the Petrobangla about the sale of its Bangladesh stakes to Australian oil and gas exploration and production company - Santos.
"Cairn has informed us about its sale of stakes to Santos recently," Petrobangla chairman Jalal Ahmed told the FE.
Santos on October 26 last announced that it had acquired various assets in Bangladesh, including a 37.5 per cent interest in the Sangu gas field and a portfolio of exploration acreage from Cairn Energy PLC.
Talking further on Cairn's sale of assets to Santos, the Petrobangla Chairman said: "The sale will be effective as per the terms and conditions of the production sharing contract (PSC) signed between the company and the Petrobangla."
According to the existing PSC, informing the news of selling stakes to Petrobangla is enough to ensure effectiveness of such deal as no prior approval from Petrobangla is required in this regard.
Petrobangla's permission is, however, necessary before selling of operation right by an international oil company (IOC) to any other IOC, as per the existing PSC provision.
With this acquisition, Santos will hold a 37.5 per cent interest in the Sangu Development Area, 37.5 per cent interest in Block 16 exploration acreage and 45 per cent interest in exploration Blocks 5 and 10.
The net average gas production from the Sangu field up to 30 September 2007 was 34 million cubic feet per day (mmcfd) and net proven and probable (2P) gas reserves acquired are approximately 34 billion cubic feet.
The portfolio provides Santos with a 37.5 per cent interest in another offshore Magnama gas exploration well.
The Cairn Energy initiated drilling in the Megnama structure on October 3, 2007 and the company drilled some 2,400 meters until October 31.
The company is expected to reach a total depth of 4,500 meters by early December 2007.
The acquisition deal was done at US$50 million. It will also include contingent payments of $20 million, payable in installments depending on future development results from the current drilling programme.
Cairn has been in Bangladesh for more than 10 years.