Mubadala Petroleum has signed an agreement to farmout a 20% participating interest in each of the Andaman I and South Andaman gross split production sharing contracts (PSCs) to UK’s Premier Oil.

The company operates both the Andaman I and adjacent South Andaman gas blocks located offshore Aceh, Indonesia in North Sumatra basin.

Following the farmout the company, which is a unit of Abu Dhabi’s strategic investment firm Mubadala Investment Company, will have an 80% interest in the blocks and will be the largest operator of both concessions. Furthermore, it will become the largest net acreage holder in the unexplored but proven North Sumatra basin area.

The company is also a partner in the Premier Oil-operated Andaman II block with a 30% participating interest.

Mubadala Petroleum CEO Dr Bakheet Al Katheeri said: “With this farmout, Mubadala Petroleum will extend its partnership with Premier Oil for the exploration of the Andaman blocks offshore Aceh.

“Both partners have a strong commitment to this new high impact growth area which supports Mubadala Petroleum’s growth strategy of finding and, if successful, developing gas for Indonesia’s growing markets.”

As the company has participating interest in three adjacent blocks and controls the most acreage in the area, they have the potential for future exploration growth in the Sumatra basin.

Completion of the transaction is subject to customary conditions including approvals by the government. The companies have not disclosed the financial details of the transaction.

In December 2018, the Egyptian government approved the sale of 45% interest in Eni’s Nour North Sinai Offshore concession in the Eastern Mediterranean to Mubadala Petroleum and BP.