Farmout will be soon!!!22 Aug 2025 12:54
Conrad Asia Energy has been actively working on a farm-out process for a portion of its interest in the Duyung Production Sharing Contract (PSC), where the Mako gas field is located.
Here's a breakdown of the situation regarding the Conrad Asia Energy Mako farm-out:
Farm-out Process: Conrad is seeking to divest a portion of its interest in the Duyung PSC through a farm-down process. They have engaged a global investment bank to manage this process, and bids are expected soon. This strategy provides flexibility for project financing as they aim to bring the Mako project to a Final Investment Decision (FID).
Context: Farm-out agreements are crucial in the oil and gas industry, allowing companies to acquire or divest interests in upstream assets in exchange for work obligations or reimbursement of past costs.
Mako Gas Field: The Mako gas field, located in the Duyung PSC offshore Indonesia, is considered a significant gas discovery, containing substantial 2C Contingent Resources.
Gas Sales Agreement (GSA): A key development supporting the farm-out process and FID was the signing of a binding Gas Sales Agreement (GSA) with PT PLN Energi Primer Indonesia (PLN EPI), a subsidiary of the Indonesian state-owned power utility, PT Perusahaan Listrik Negara (PLN Persero). This GSA stipulates that all gas produced from the Mako field will be sold domestically to PLN EPI at a price linked to the Indonesian Crude Price (ICP). This agreement is expected to significantly underpin the value and financial viability of the Mako project.
Previous Agreements Terminated: Previously negotiated GSAs for Mako gas with PT Perusahaan Gas Negara and Singapore-based Sembcorp Gas were terminated as a result of the Indonesian government's directive to allocate all Mako gas for domestic use.
Importance of GSA: According to Conrad, the GSA is crucial for securing the FID and proceeding with the Mako gas field development.
In summary, Conrad Asia Energy is actively pursuing a farm-out agreement for a portion of its interest in the Mako gas field within the Duyung PSC. The recent signing of a binding Gas Sales Agreement with PLN EPI for domestic gas supply is expected to be a significant factor in facilitating this farm-out and moving the project towards a Final Investment Decision.
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