Rift Basin Resources Corp., Vancouver, BC, has signed a memorandum of understanding with PT Sinergi Wijaya Kusumah to evaluate and redevelop an onshore multireservoir oil field known as the Dandangilo & Beji block in Bojonegoro, East Java, Indonesia.
PT Sinergi has the rights under a renewable 5-year cooperation agreement with KUD Sumber Pangan to produce oil from existing shut-in oil wells in the 80 sq km area. Six wells are producing 1,500 b/d of oil. The area contains 110 wells.
KUD is a district-level cooperative with the rights, under a petroleum production contract with PT Pertamina, to lift and raise oil from relinquished and mature fields and deliver to an agreed point as approved by the Ministry of Natural Resources.
Pertamina has recorded 20 million stb bbl of production during 1963-80 from original oil in place of 112 million stb.
Rift Basin entered into a separate MoU under which Rift Basin and Portvest International Sdn. Bhd., through a newly established Indonesian foreign investment company, will jointly hold 70% of PT Sinergi, which in turn holds the rights to exploit the field. Portvest will be the operator and responsible for funding initial service and enhancement work required to establish initial production cash flow and attract a project lending facility.
The MOUs do not create obligations other than giving Rift Basin the opportunity to negotiate and enter into definitive agreements and in the case of the PT Sinergi MOU, to establish enhanced oil recovery and production. Rift Basin expects that PT Sinergy, Portvest, and related parties may introduce other fields to Rift Basin for joint development and benefit in due course.
