Andalas Energy and Power Farms Into Indonesian Oil, Gas Concession

Isle of Man based Andalas Energy and Power (ADL) has signed a non-binding heads of agreement to buy stake in Indonesian oil and gas concession.

In a statement published Wednesday, the company said under the terms of the proposed farm in, Andalas will acquire a 30 percent direct working interest in Tuba Obi East oil and gas concession (TOE) in Jambi province, Sumatra, Indonesia through the execution of a single well work programme. 

Block operator PT Akar Golindo and Andalas will jointly operate during the work programme, which is expected to cost around $1.075 million. Andalas has agreed to pay a further sum of $500,000 to PT Akar Golindo if the concession is renewed.

Any future gas production from the concession may support either gas export with the project located close to a major export route; or gas-to-power being located in an area where a significant shortfall in energy generation exists.

“TOE is ideally located adjacent to the major Sumatran gas pipeline to Duri and Singapore, and close to the provincial capital city of Jambi which is in critical need of power generation. We see great potential to add further value by expanding the concession to capture additional gas discoveries just outside the acreage,” Andalas CEO, David Whitby, said.

According to Andalas, Tuba Obi East has tested gas in the key South Sumatra hydrocarbon bearing formations, namely, the Air Benakat Formation (ABF) and the Talang Akar Formation (TAF).