Primary tabs

GSS Energy seeks to be valued as O&G play

Kang Wan Chern Published on Wed, Jun 14, 2017 / 8:57 AM GMT+8

A-

A+

This article appears in Issue 783 (June 12) of The Edge Singapore which is on sale now

(June 14): Sydney Yeung, CEO of GSS Energy, thinks investors are undervaluing the company’s oil and gas (O&G) business. Formerly a precision engineering company known as Giken Sakata, GSS now also has an onshore oil production business in Indonesia. Last year, it entered into an agreement with Indonesian state-owned oil company Pertamina to assist the latter in producing petroleum at the Trembul Operation Area for a period of 15 years. The 47.6 sq km area in Central Java is estimated to have approximately 24.3 million stock tank barrels of contingent resources at a depth of up to 800m. Stock tank barrels refer to the volume of oil after production at surface pressure and temperature.

GSS is entitled to 23.5% of the petroleum and 31.4% of the natural gas in the Trembul Operation Area after accounting for operating costs. Under the terms of the agreement, GSS will be able to recover all its operating costs. There is also no minimum level of production required. “We are now at the advanced stage of preparing for production and expect to commence drilling by 2H2017,” Yeung tells The Edge Singapore. “We see a lot of opportunity to grow in the O&G sector, especially in Indonesia where demand can only rise as the country develops.”