Husky, CNOOC to jointly develop Madura BD field

By OGJ editors
HOUSTON, Apr. 18 -- Husky Energy Inc., Calgary, has reached an agreement with China's CNOOC Ltd. to jointly develop Madura BD gas and natural gas liquids field off East Java, Indonesia (OGJ, Jan. 22, 2007, p. 37). The agreement covers the development and further exploration of the Madura Straits production-sharing contract.

Deal specifics include payment of $125 million to Husky by CNOOC to acquire a 50% equity interest in Husky Oil (Madura) Ltd., which holds a 100% interest in the Madura Straits PSC.

Madura Straits PSC covers 2,794 sq km of exploration acreage about 40 km north of East Java. Since 1984, ten wells have been drilled on this block, resulting in two discoveries: Madura BD and MDA fields. In 2007, Husky signed three gas sale and purchase agreements for the sale of 100 MMcfd of gas from Madura BD field to East Java buyers.

CNOOC subsidiary CNOOC Southeast Asia Ltd. currently operates two blocks in Indonesia and holds interests in numerous other blocks.

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

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