Coro Duyung, a subsidiary of Southeast Asia’s Coro Energy, has received the green light from its shareholders to sell its interest in a production sharing contract (PSC) in the West Natuna Sea off the coast of Indonesia to the Singapore-headquartered natural gas player Conrad Asia Energy.
This brings Conrad closer to formally acquiring Coro’s 15% interest in the Duyung PSC, holding the Mako field. The field is operated by Conrad Asia Energy’s wholly-owned subsidiary West Natuna Exploration Limited (WNEL) with 76.5% interest, while the remaining 8.5% stake is held by Empyrean Energy.
Once the transfer of Coro’s participating interest is completed, which is conditional upon approval from Indonesia’s Ministry of Energy and Mineral Resources, Conrad will hold a 91.5% operated interest in the Duyung PSC through WNEL.
“Approval of the Settlement Agreement by Coro shareholders resolves a long-standing dispute regarding the payment of outstanding cash calls arrears between Conrad and Coro. The increase to 91.5% PI provides the company with flexibility in its farm out and project financing options thus enhancing its ability to bring the Mako project to FID,” said Conrad’s Managing Director and Chief Executive Officer, Miltos Xynogalas .
As disclosed when the deal was announced last month, Coro Duyung will be released from any obligation to pay existing or future cash calls, while Coro is set to pay $300,000 in cash to WNEL.
Additionally, once government approval is received, 500,000 new ordinary shares are to be issued to Coro at no par value in Conrad, followed by further new ordinary shares in Conrad to Coro equal in value to $750,000 within 45 days of the first commercial production from the Duyung PSC.
Duyung is located in the Riau Islands Province in Indonesian waters, approximately 400 kilometers northeast of Singapore’s Batam. The Mako field is estimated to contain 2C contingent resources of 376 billion cubic feet (Bcf), 231 Bcf of which will be net attributable to Conrad following the transaction. The field is expected to start production in 2026.
Due to the strong growth in domestic demand for gas in Indonesia, the country’s Ministry of Energy and Mineral Resources recently issued a directive to make all gas from the Mako field available for the domestic market. This was seen as an important step in the field’s commercialization.