POSCO International-Indonesia mines

▲ The image, provided by POSCO International Corp. on July 25, 2023, shows the location of the Bunga gas mine, marked in red, where POSCO will carry out an exploration and production project for oil and gas, in Indonesia, colored in blue. (PHOTO NOT FOR SALE) (Yonhap)

POSCO International-Indonesia mines

POSCO International signs contract with Indonesia for oil, gas exploration

By Kim Seung-yeon

SEOUL, July 25 (Yonhap) -- POSCO International Corp. said Tuesday it signed a contract with the Indonesian government and its state oil company to search and extract oil and gas in the Southeast Asian country, as it bolsters the push for energy and resources development.

The production sharing contract (PSC) with Jakarta and state-owned PT Pertamina Hulu Energi (PHE) will give POSCO International the rights to explore the Bunga gas block off the eastern Java Island for six years, and develop and produce oil and gas in the field for 30 years, the Korean company said in a release.

A PSC is an agreement between a government and one or more natural resources companies on specifying the percentage of the extracted resources each party will get after the participating companies recover the costs and expenses.

The sharing ratio for the Bunga project is set at 60:40 for oil and 55:44 for gas between the Indonesian government and the two companies. POSCO International and PHE each hold a 50:50 stake for their participation in the project.

The Bunga gas block, with a depth of 50 meters from the shallow sea to the deep sea of 500 m, covers 8,500 square kilometers, about 14 times the size of Seoul. POSCO International said it is estimated to have some 1.3 billion barrels of natural gas reserves, citing a Reuters report.

POSCO International, a unit under South Korean steel giant POSCO, operates gas fields in Myanmar and Australia. It has been carrying out another gas exploration project in Malaysia since 2021.

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