Asia PR News

ADELAIDE, May 31/MediaNet International-AsiaNet/ –

Santos Limited today announced the signing of a long-term contract for the
sale of gas from its 75% owned Maleo field in Indonesia to PT Perusahaan Gas
Negara (PGN).

Santos (Madura Offshore) Pty Ltd, a wholly-owned Santos subsidiary and
operator of the Madura Offshore PSC, has contracted to sell the entire reserves
of the Maleo field generating revenue (based on the proven and probable or 2P
reserves) in excess of US$550 million (A$700 million) over the 8 to12 year
field life.

The joint venture expects to start work shortly on the production facilities
with a development capital budget of approximately US$75 million (A$100
million).

The Gas Sales Agreement (GSA) is subject to conditions which are expected to
be fulfilled within approximately 30 days and gas production is expected to
commence in the second half of 2006.

Santos’ Managing Director, Mr John Ellice-Flint said “The signing of the GSA
marks another milestone in the development of the Maleo field. The project is
being advanced in a rapid timeframe, thanks in part to the recent Indonesian
regulatory changes to reduce diesel subsidies and encourage greater use of gas.

“Importantly for our overall growth plans, it also represents another step
in our international diversification and gas commercialisation strategy,” he
said.

The gross Maleo 2P reserves of about 240 billion cubic feet will be produced
using a leased Mobile Offshore Production Unit and an 8 kilometre spur line to
the under-utilised East Java Gas Pipeline that supplies Surabaya.

Under the GSA, the joint venture will supply gas at a plateau rate of up to
110 million standard cubic feet per day. Plateau production is expected to
last for at least six years.

The GSA follows the Heads of Agreement signed in January 2004 and subsequent
negotiations to finalise issues related to credit risk.

The Maleo gas field is located in the Madura Offshore Production Sharing
Contract (PSC) and was discovered in June 2002. It is located in 58 metres of
water in the Madura Strait, 140 kilometres east of the city of Surabaya in the
East Java region of Indonesia.

Santos farmed into the Madura Offshore PSC following the Oyong gas and oil
discovery made in the adjoining Sampang PSC in August 2001.

Participants in the Madura Offshore PSC are:

Santos (Madura Offshore) Pty Ltd (Operator) 75%

PC Madura Ltd 25%

PC Madura Ltd is a wholly owned subsidiary of Petronas Carigali Sdn Bhd.
Petronas Carigali is the state-owned Malaysian petroleum exploration and
production company with interests worldwide.

PGN is Indonesia’s leading natural gas utility, with a significant gas
distribution business in East Java. Formally entirely state-owned, PGN
completed a successful partial privatisation, whereby the Indonesian Government
divested 30% of its interest in the company to public shareholders. The public
shares in the company are listed on the Jakarta Stock Exchange.

FOR FURTHER INFORMATION PLEASE CONTACT:

Media enquiries:
Kathryn Mitchell
+61-8-8218 5260 / +61-407-979-982

Investor enquiries:
Andrew Seaton
+61-8-8218-5157 / +61-410-431-004

Santos stock symbols: STO (Australian Stock Exchange), STOSY (NASDAQ ADR)

Source: Santos Limited