Westside quits Indonesia

Brisbane-based WestSide Corporation now owns a drill rig after abandoning its coal bed methane venture with Indonesia’s Bumi Resources, the Australian company has announced.

WestSide chief executive Julie Beeby said the company had originally signed agreements with Bumi and its subsidiaries Kaltim Prima Coal (KPC) and Arutmin Indonesia to focus on projects in Kalimantan. 

The company had already invested $2 million to date in the PT Seamgas Indonesia joint venture and had commissioned the rig Bumi acquired in 2008 for $4.2 million, she said.

"However, confirmation of WestSide's tenure and operatorship in these areas has not been forthcoming to enable us as the operator to progress from the Project Definition Study to an exploration campaign," she said. 

The entry of new participants in production sharing contracts, including Pertamina, Energi Mega Persada and Tata had further diluted the company’s potential interest and made the joint venture more complicated, Beeby said. 

The conclusion of the deal would give the chance to focus exclusively on its projects in the Bowen and Galilee basin and the Meridian SeamGas project, all in Queensland, she said.

"Investing to increase certified (proven and probable) reserves within our producing gas field, where we have the added benefit of immediate gas sales, offers a superior and timelier return on shareholders' funds than pursuing greenfield Indonesian prospects better suited to international energy majors," Beeby said. 

It also gave WestSide unencumbered ownership of the Schramm TXD 180 drill rig, which it had been using at its Tilbrook, Mount Saint Martin, Paranui and Pretty Plains project areas for Meridian SeamGas since October 2009. 

Beeby said the rig would be leased out at commercial rates when not required by WestSide. Bumi holds an 8.8% stake in the Australian company. Source: Upstream Online