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Premier Oil is a leading FTSE 250 exploration and production company with interests in Asia, the Middle East, Pakistan, the North Sea and West Africa

Based in the UK, Premier Oil has been a major partner in Indonesia’s economy and an active member of the community in Indonesia for some 11 years. Today it stands as one of the fastest growing UK investment success stories in the country. “We are very fortunate to have access to some very good opportunities within Indonesia,” says Peter Mills, president of Premier Oil. “Relationships are so important in Indonesia. We definitely have a very good working relationship with the government, which has been developed through hard work, commitment and delivery – all of the things that the government is looking for from an oil and gas company. If you can do these things well, you’ll get on fine in this country.”

The company plays a solid role in strengthening international relations, as Mr Mills explains: “We have been invited on a number of occasions to accompany government delegates to London to present our Indonesian activities to British companies and also to highlight the benefits of operating here. It’s a very positive message as they see that we are a successful company whose staff enjoy working here.”

Premier’s profit after tax for 2006 amounted to $67.6 million. Its year-end net cash position of $40.9 million reflects the company’s drive for strong cash generation and prudent cost management. Its Natuna Sea Block A operation consists of three platforms with an FPSO (floating, production, storage and offloading unit). The most recent platform was installed last year and was the result of over 800,000 working hours for this development with no loss of time due to injuries. “It was a huge achievement and the result of dedicated professionalism,” cites Mr Mills.

PETER MILLS, President of Premier Oil Indonesia

Premier’s strategy for growth through exploration, production and acquisition underpins its 2010 production target of 50,000 barrels of oil equivalent per day. Through its operations in the Natuna Sea Block A, which includes the Anoa oil field and substantial gas reserves, Premier and its WNG partners supply the gas used to generate one third of Singapore's domestic electricity needs down a 310-mile pipeline. “This is our flagship business,” remarks Mr Mills. “We are close to finalising a further opportunity that will effectively double the output from our Natuna Sea assets and will significantly transform the company.”

In April 2006, Premier purchased 16.67 per cent equity in North Sumatra Block A in the Aceh region, which was increased to 41.7 per cent in January 2007. The proposed developments in this block will lead to around a $500-million investment to produce gas and oil. The partnership plans to develop the 500 bcf of gas in existing fields on the block to supply local fertiliser plants and aims for first gas in 2010. “The government is very supportive in progressing this development in Aceh and will hopefully enable a fast-track development which will be a tremendous boost to this region. They are now recovering from the terrible tsunami in Aceh and this development will provide further positive progress in the region. We at Premier Oil are glad to be playing a part in such an important national development,” says Mr Mills.

In December 2006, Premier was awarded an exploration licence on Buton Island in South Sulawesi, a remote part of the country. “This will hopefully lead to high impact exploration opportunities,” he continues. “The oil is actually seeping to the surface – so we know that the source is there. The challenge will be to find it underground. We have a three-year programme to do just that with the operator Japex and our other partner Kufpec.”

In 2007, Premier was awarded Operatorship of Tuna PSC, providing a fifth key asset to the Indonesian operations. Tuna PSC is very far north in the Natuna Sea and lies on the Vietnamese border. Premier’s exploration focus will lead to two exploration wells being drilled in 2009 and will hopefully lead to high impact exploration opportunities close to its existing infrastructure.

In 2006, Premier retained its FTSE4Good listing. Mr Mills concludes, “We are committed to ongoing Corporate Social Responsibility programmes aimed at developing sustainable sources of economic empowerment in the areas in which we work.”