Fri 24 Nov 2006

Jeruk field update

Further to Singapore Petroleum Company Limited ("SPC") announcements (SGXNET announcements No. 4, No.16 and No.3) on 2 August 2006, 14 July 2006 and 5 January 2006 respectively, SPC wishes to provide an update on the Jeruk Field in the Sampang Production Sharing Contract ("Sampang PSC").

Santos Limited ("Santos"), co-venturer and operator of the Sampang PSC, issued an announcement on the Jeruk Field on 24 November 2006. The following is an extract from the Santos announcement:

"The Jeruk oil discovery is located in the Sampang PSC, offshore Indonesia, approximately 42 kilometres from the city of Surabaya.

As foreshadowed in Santos' ASX releases following the Jeruk-3 appraisal well (dated 14 July 2006 and 2 August 2006), technical work has been ongoing to integrate all well and seismic data to better determine the most likely oil resource range.

This analysis is now largely complete and whilst there are substantial remaining reservoir uncertainties, the upside recoverable oil resource for Jeruk is most likely to be less than 50 million barrels.

Opportunities to commercialise Jeruk are being pursued, however plans for additional appraisal drilling have been placed on hold pending the review of development scenarios and the resolution of commercial and technical issues which may potentially impact the viability of any development."


SPC holds its interest in the Sampang PSC through its wholly-owned subsidiary, Singapore Petroleum Sampang Ltd ("SP Sampang").

As advised on 5 January 2006, SPC's economic interest in the Jeruk Field has been reduced to 21.8% following a revenue and costs sharing arrangement with Medco Strait Services Pte Ltd ("Medco Strait") in which SP Sampang transferred an 18.2% economic interest in the Jeruk Field to Medco Strait in exchange for Medco Strait reimbursing SP Sampang of its proportionate share of past Jeruk cost and in-kind premium that Medco Strait was entitled to receive from Santos following SP Sampang's reinstatement in the Jeruk Field.

SP Sampang's agreement with Medco Strait would enable SPC to benefit from early cash flow from a future Jeruk production at its current effective economic interest of 19.6%, proportionately adjusted to include PT Petrogas Oyong Jatim's ("Petrogas") 10% participation in the Sampang PSC, subject to finalisation of documentation.

SPC continues to hold a 36% interest in the other parts of the Sampang PSC, adjusted to include Petrogas 10% participation in the Sampang PSC, subject to finalisation of documentation.


FINANCIAL IMPACT

The Group does not expect the above to have any material impact on the earnings per share and the net tangible asset per share of the SPC group of companies for the current financial year.