The Sebatik PSC is located in the Tarakan Basin close to the border with Malaysia in East Kalimatan. In October 2005 Star Energy signed a 30 year production sharing contract (PSC) to explore an area that has been more or less underexplored for more than a quarter of a century. The Tarakan Basin is one of the major oil and gas producing provinces that has been established for almost a century.

Sebatik and Nunukan Islands are situated in the northern part of the Tarakan Basin within the Sebatik PSC. On the south-east coast of Sebatik Island several oil seeps occur along a well exposed section dominated by several major faults. The obvious inference shows that the faults have controlled oil migration most likely originating from a working source kitchen. The recent discovery in Badik-1 well to the south of the Sebatik Block has high graded the offshore area of the PSC to be the most attractive portion for hydrocarbon prospectivity in the PSC. The Sebatik PSC covers around 1,385 km2 with 35% of the PSC being onshore and 65% offshore where Star Energy acts operator on the PSC.

Star Energy acquired about 520 line kilometers of 2D onshore seismic in 2006 and performed several G&G studies. In July 2011 BPMIGAS granted Star Energy, an extension of the exploration period. In March 2012 Star Energy successfully completed a 2D marine seismic of around 510 line kilometers without LTI. Based on newly acquired seismic and play mapping derived from field study performed recently, it is clear that Sebatik PSC possesses the potential for hydrocarbon systems and exploration opportunities in the northern Tarakan Basin. Star Energy is committed to continue exploring the PSC and is planning to drill a well in 2013.
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