Conrad Asia Energy has secured a partnership with Nations Natuna Barat, a subsidiary of Indonesia's Arsari Group, to advance the development of the Mako gas field. This partnership enables the project to move towards a final investment decision.

Transaction Details

Nations Natuna Barat will acquire a 75% non-operated participating interest in the Mako field, located on the Duyung production sharing contract in the Natuna Sea. Crucially, Nations will provide full financing for all project development costs and associated working capital, estimated at US$320 million, through to the start of commercial gas production, subject to government approvals. This arrangement follows the departure of previous partners who were unable to meet financial commitments.

Project and Resource Overview

The Mako field, discovered in 2017, contains best-estimate contingent resources of 413 billion cubic feet of gas, making it the largest unexploited gas resource in the area. The development plan, which received Indonesian government approval in 2022, favors using a leased mobile offshore production unit (MOPU). Indonesian contractors have already performed front-end engineering and design work for the subsea infrastructure and the MOPU.

Commercial and Development Arrangements

All gas production is mandated for Indonesia's domestic market. Conrad, as operator, has progressed technical and commercial discussions with Star Energy for a facilities sharing agreement to tie the Mako export pipeline into the adjacent Kakap KF facilities. The financial structure includes a Carry Loan Agreement, which will govern the cost recovery for Conrad's subsidiary, West Natuna Exploration Limited (WNEL), through future production revenues.

Benefits and Future Outlook

WNEL will retain a 25% participating interest and operatorship of the project. It will also receive a US$16 million consideration, payable in three tranches. The secured funding covers Conrad's share of development expenditure and positions the project for first gas in the fourth quarter of 2027. The partnership is described as transformational for Conrad, providing the capital to bring Mako into production. Furthermore, net proceeds from this funding and future Mako cash flows will support Conrad's advancement of its other assets in its wholly-owned Aceh production sharing contracts.

This material is an AI-assisted summary based on publicly available sources and may contain inaccuracies. For the original and full details, please refer to the source link. Based on materials by Amanda Battersby. All rights to the original text and images remain with their respective rights holders.