(EnergyAsia, August 26, 2013, Monday) — Australian upstream company Santos said it has paid compatriot AWE an initial sum of US$100 million for a 50% stake in Indonesia’s Northwest Natuna production sharing contract (PSC).

The payment could rise by another US$88 million if Santos, which has taken over as operator, decides to develop the Ande Ande Lumut (AAL) oil field within the PSC. Discovered in April 2000, AAL is said to contain 100 million barrels of proven and probable crude oil reserves.

AWE, which fully acquired the field from Malaysia’s Genting Oil and Gas for US$139 million last year, is planning to start production by end-2015. It had planned to invest US$700 million to achieve production of as much as 40,000 b/d.

Santos’s vice president for the Asia Pacific, Martyn Eames, said the acquisition was consistent with its growth strategy in the region.

“Ande Ande Lumut is a near term oil development project located in Indonesia, a country where Santos has a long track record, deep experience and demonstrated capability,” he said.

“Our Jakarta based team has successfully delivered three offshore developments in recent years – Maleo, Oyong and Wortel – and is presently working on a fourth at Peluang.

“Santos also has considerable experience in developing and operating FPSO-based oil projects, most recently with the successful Fletcher Finucane development in Australia, which was delivered ahead of schedule and under budget.”