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Coro walks away from Indonesian farm-in deal
FINANCE & INVESTMENT
\UK-LISTED junior Coro Energy has ditched plans to acquire a 42.5% interest in the Bulu PSC o shore Indonesia, with the company citing a signi cantly increased risk attached to the deal.
e Southeast Asian-focused developer said in September 2018 that it had signed binding agree- ments to farm in to the shallow-water PSC o shore East Java, which contains the Lengo gas eld.
While Coro originally agreed to pay slightly more than $12mn to Australia’s AWE – which was later bought by Japan’s Mitsui – and Singa- pore’s HyOil, the terms were revised in July 2019 so that cash and share payments would be split into four tranches.
The transaction was supposed to be com- pleted on December 2, but Coro announced on December 3 that the long stop date had passed without the necessary regulatory approvals being secured and that the companies were in talks about negotiating a further six-month extension.
Coro said on January 31, however, that it was walking away from the deal because of out- standing approvals, concerns around the future of operating partner Kris Energy, potential part- nership changes in the PSC and the possibility of new licence requirements being introduced.
Singapore’s Kris Energy has a 42.5% stake in Bulu, while locally owned Satria Energindo and Satria Wijaya Kusuma own 10% and 5% respectively.
Coro’s concerns about KrisEnergy stem from the fact that the company is in the midst of nancial restructuring and has already agreed to sell its 30% stake in Indonesia’s Andaman II deepwater PSC to super-major BP. e debt-laden company said in October that it would not redeem its notes in order to conserve cash during the restructuring process. e company received a three-month court pro- tection order against its creditors in Singapore in September and was granted another three-month extension on November 27.
Coro’s CEO, James Menzies, said: “[T]he increased risks around the Bulu project have led us to terminate the transaction, allowing us, with 2020 shaping up to be a highly active M&A market in the region, to focus our resources on opportunities that can provide near-term impact on the company and value to its shareholders.”
Energy consultancy Wood Mackenzie said in a report on the Lengo eld that it contained an estimated 360bn cubic feet (10.2bn cubic metres) of gross recoverable gas, including 20% nitrogen and 13% carbon dioxide (CO2).™
Malaysia’s Sarawak State calls on Petronas to up social contributions
POLICY
Sarawak Transport Minister Lee Kim Shin
MALAYSIA’S Sarawak State has called on state oil major Petronas to pay a social windfall tax when international oil prices top $100 per barrel.
Sarawak Transport Minister Lee Kim Shin said the company should consider increasing its charitable contributions to local projects, given that most of the company’s production comes from the state’s elds.
“If you [Petronas] are not making much, we wouldn’t demand because we understand what the economy is like. But if you’re getting bigger pro ts, you should consider giving us extra,” the minister said on February 2.
e minister’s comments were made during a speech celebrating the Petronas Foundation’s
Sentuhan Kasih Chinese New Year 2020 pro- gramme. Under this, Petronas makes charitable contributions during festive seasons, including MYR2mn ($488,000) to the palliative care divi- sion of Sarawak’s Miri Hospital.
Dignitaries present included Petronas Sar- awak general manager Zulaihi Mantali and Pet- ronas Carigali-Sarawak senior general manager Morris Mail.
Shin’s comments come as the state strives to exert more in uence over its oil and gas reserves, which are currently under Petronas’ control.
e state government took Petronas to court last year a er the rm failed to remit MYR1.3bn ($317.3mn) in state sales taxes (SST) on oil, gas
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