Singapore Petroleum sells interest in Jeruk Field to PT Medco Energi Internasional for $148 million
Clients Singapore Petroleum Company Limited
Jones Day advised Singapore Petroleum Sampang Ltd (SP Sampang), a wholly owned subsidiary of Singapore Petroleum Company Limited (SPC), in its sale of an economic interest in the Jeruk oil field to Medco Strait Services Pte Ltd (Medco), a subsidiary of PT Medco Energi Internasional Tbk. The Jeruk field is located in the Sampang Production Sharing Contract, located in the Madura Strait, offshore East Java, Indonesia. We earlier advised SPC on its acquisition of SP Sampang.
Jones Day also advised SP Sampang on the reinstatement of its 40% interest in the Jeruk field, which was a sole-risk discovery, pursuant to which it incurred a liability to pay a premium of US$145 million out of future production from the Jeruk field. Under the Medco transaction, SP Sampang transferred approximately 18.2% of its 40% interest in the Jeruk field to Medco in exchange for Medco (i) reimbursing US$16 million of previous costs incurred by SP Sampang in developing the Jeruk field, and (ii) undertaking to reimburse 90.91% of the premium that SP Sampang is required to pay out of future Jeruk production, valued at approximately US$132 million. The transaction did not affect SP Sampang's interest in the remainder of the Sampang Production Sharing Contract, which remains at 40%.