In recent years, Hess Corporation has built a portfolio of producing and development assets that provide a significant position in the region's growing energy markets. These assets include Block A-18 in the Malaysia Thailand Joint Development Area (JDA), Pailin and Phu Horm in Thailand, and Ujung Pangkah, Natuna and Jambi Merang in Indonesia.

Hess' regional center in Kuala Lumpur provides a hub for technical and business services in support of the growing business in South East Asia. Country offices are located in Jakarta and Bangkok.

Hess Corporation holds a 50% working interest in Block A–18 which is located within the Malaysia–Thailand joint development area (JDA), in the Gulf of Thailand. The block is operated by Carigali Hess Operating Company, a 50/50 joint venture with PETRONAS Carigali.

A Phase 1 gas sales agreement (GSA) was signed in 1999 to deliver three hundred and ninety million cubic feet of natural gas per day gross over a twenty year period. First gas was delivered on schedule in 2005 through a purpose built thirty four inch pipeline to Thailand.

The Corporation negotiated a supplementary GSA in 2004 (Phase 2) for an incremental quantity of four hundred million cubic feet of natural gas per day gross over a twenty year period commencing in 2008. A significant expansion of the infrastructure is currently underway to accommodate the wells and production required to fulfill the Phase 2 obligations.

The Corporation's net share of 2006 production from Block A–18 in the JDA averaged 23,000 barrels of oil equivalent per day.

The Hess operated Phu Horm field (Hess 35%) commenced first production ahead of schedule in November 2006. The Phu Horm field is situated over two onshore blocks located in the northeast region of Thailand.

A gas sales agreement provides for the supply of 500 billion cubic feet of natural gas (gross) from the field over a 15 year period. The gas is purchased by PTT Public Company Limited and delivered to the gas–fired power station at Nam Phong.

Net production rates at Phu Horm should plateau in 2007 at approximately 5,000 barrels of oil equivalent per day for the Corporation.

The Pailin field (Hess 15%) has been in production since August, 1999. Gas from Pailin is exported via an existing pipeline to the mainland, with liquids evacuated to a floating storage unit. The Corporation's share of production from Pailin averaged 12,000 barrels of oil equivalent per day in 2006.

The Ujung Pangkah project (Hess 75%), where the Corporation is the operator, is expected to commence gas sales by mid 2007 under an existing gas sales agreement for 440 billion cubic feet (gross) over a 20 year period with an expected gross plateau rate of 100 million cubic feet (gross) per day. The Corporation's plans for Ujung Pangkah in 2007 include drilling additional development wells, the completion of onshore and offshore gas facilities and the commencement of a crude oil development project. The Corporation also owns an interest in the Jambi Merang natural gas project (Hess 25%), and the Natuna Block A PSC (Hess 23%).

The Corporation's share of production from Indonesia averaged 4,000 barrels of oil equivalent per day in 2006.

AZERBAIJAN The Corporation has an interest in the ACG fields (Hess 2.72%) in the Caspian Sea. Net production from its interest averaged 7,000 barrels of crude oil per day in 2006 and 4,000 barrels per day in 2005. Phase 2 production from the ACG fields commenced during 2006. The Corporation also holds an interest in the BTC Pipeline (Hess 2.36%), which started operation in the second quarter of 2006.