RIMS, Petronas to jointly operate Karapan

RIMS, Petronas to jointly operate Karapan

The Jakarta Post, Jakarta

RIMS Energy Karapan Ltd (REKL) has transferred a 50 percent
working interest in the Karapan exploration block offshore East
Java to Petronas Carigali Overseas Sdn Bhd (PCOSB), a subsidiary
of Malaysia's state oil and gas firm Petronas.

Both firms will jointly operate the block through a newly-
formed, equally-owned joint operating company pending the
approval of the Directorate General of Oil and Gas, better known
in the industry as Migas, and state oil and gas company
Pertamina.

The Karapan block covers an area of 2,839 square kilometers
and is located adjacent to the Ketapang block, also offshore East
Java, where significant oil and gas has recently been discovered.
It also possesses the same geological features as the Ketapan
block, where PCOSB has a 50 percent working interest.

"We expect to commercialize the block before 2004 and aim to
become a significant oil and gas producer in East Java by 2005,"
Dixie Bastian, REKL president and CEO, said in a statement.

"Any economic gas discovery in Karapan would only be easily
developed and absorbed by the growing market in East Java," he
added.

According to Dixie, the joint operating company has identified
nine drillable prospects in Karapan with recoverable potential of
680 million barrels of oil and 2.5 trillion cubic feet of gas
with a 50 percent success profitability.

The joint venture plans to drill three exploration wells in
Karapan beginning June 2002, and at least one well in 2003.

The productivity of the Karapan block has been proven by
former operator Cities Service, which drilled the JS 14 A-1 well
in 1976. The well produced 520 barrels of oil per day and 25
million standard cubic feet per day of gas.