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Abu Dhabi-based Mubadala Energy and UK-headquartered Harbour Energy are set to develop the Central Andaman oil and gas block after inking a development contract with Indonesia’s government, according to an Energy Ministry statement picked up by Reuters. This comes less than two months after the pair received the exploration license for the block from Indonesia’s MIGAS.
About the block: Located offshore northern Sumatra, the block is estimated to hold 100 mn barrels of oil and 500 bn cubic feet of gas, the newswire reports, citing Energy Ministry data. Harbour Energy holds a 60% operating stake in the block, while Mubadala Energy owns a 40% stake.
The agreement employs a new model of revenue sharing: This is the first contract to employ Indonesia’s gross split scheme, which was launched in 2017. The scheme divides gross production between contractors and the government based on agreed-upon percentages. The goal is to streamline contracts and make revenue more predictable.
This isn’t Mubadala’s first rodeo in Andaman: Mubadala Energy and Indonesia’s Perusahaan Listrik Negara (PLN) earlier this month inked an agreement to explore power generation from the South Andaman blocks to address Indonesia’s energy demand and for infrastructure development. Mubadala also discovered over 8 tn cubic feet of natural gas at the Layaran and Tangkulo fields in North Sumatra in South Andaman earlier in May, marking the company’s second deepwater find in South Andaman. The company wrapped up its drilling campaign in South Andaman in September.
