November 16, 2017 / 8:49 AM / a year ago

Premier Oil seeking buyers for stake in Indonesia gas field

LONDON (Reuters) - Premier Oil (PMO.L) is seeking buyers for a 25 percent stake in the Tuna field development in Indonesia after reaching a gas sale deal with Vietnam, Chief Executive Tony Durrant said on Thursday.

Premier and SKK Migas signed on Nov. 10 an agreement to sell gas to Vietnam from the Tuna development, Premier said in a trading update. The field holds around 500 billion cubic metres of resource, Durrant said.

The offtake agreement “represents a significant step forward in the potential development of the field envisaging using a new cross-border pipeline to connect the Tuna area to the existing Nam Con Son Pipeline system in Vietnam,” Premier said.

Premier will conduct appraisal drilling for the project in 2019 and will likely make a final investment decision late that year or in early 2020, Durrant told Reuters in an interview.

The UK-focused oil and gas explorer owns a 65 percent stake in the field and will seek to sell up to a 25 percent stake to a partner in order to help finance the development, Durrant said.

“We would like to keep 40 percent of the field,” he said.

Production from the field, which Premier discovered in 2014, is expected to start in 2022, he added.

Premier Oil expects its $2.8 billion debt (2.1 billion pounds) pile to start falling, with its flagship Catcher oilfield in the North Sea set to begin production on time in December, it said on Thursday.

Reporting by Ron Bousso; Editing by Mark Potter

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