Indonesia farewell: Continental has withdrawn from teh South Bengara-II joint venture
Continental farewells South Bengara-II
The global financial crisis has forced US-based Continental Energy to withdraw from the South Bengara-II joint venture.
The venture, between Continental, GeoPetro Resources and Adelphi Energy, was recently awarded the South Bengara-II production sharing contract in INdonesia's onshore play.
Continental's chief operating officer Andrew Eriksoon said:"The current world oil price and financial situation increases the expected difficulty in farming out or otherwise raising exploration capital needed for the project.
"We view South Bengara-II Block as a high risk exploration property and combined with the substantial cash demands on needed exploration work we could not justify our continued participation in the project."
Under the terms of an agreement with Adelphi and GeoPetro, both Continental and GeoPetro have withdrawn as shareholders from the group's joint venture company, ACG (South Bengara-II).
Continental has returned its 24.999% shareholding in ACG to Adelphi and has received repayment of a loan it had previously made to Adelphi.
The group's joint bid agreement which provided for the establishment of ACG and operations on the recently awarded South Bengara-II PSC has been terminated.