A Malaysian perspective

Dec. 11, 2006
Fresh from several years of exploration success in Malaysia, Arkansas-based Murphy Oil Corp. said another place it would like to be in Southeast Asia is Indonesia.

Fresh from several years of exploration success in Malaysia, Arkansas-based Murphy Oil Corp. said another place it would like to be in Southeast Asia is Indonesia.

Murphy’s growth in Malaysia began with discovery of West Patricia oil field in 2000 at its first well in shallow water and Kikeh oil field, the country’s first deepwater discovery, in 2002.

Drilling several dozen wells off Sarawak and Sabah on northwestern Borneo has given Murphy perspective on basins of similar age in Indonesia, said David Wood, president of Murphy Exploration & Production Co.

Murphy holds acreage in Malaysia’s three main producing provinces.

Sabah K fields

Murphy, with Petronas Carigali, discovered Kikeh, Kikeh Kecil, and Kakap fields on Block K in the lightly drilled Sabah Trough.

A spar has been placed in Kikeh field, in 4,400 ft of water, and a floating production, storage, and offloading vessel is to be hooked up in 2007. It is a $1.7 billion, 440 million bbl project, expected to start producing in the second half of 2007 and to deliver 30 million bbl of oil in its first 12 months.

Thirty-nine oil-producing and water-injection wells are planned. Production will rise from the initial 40,000 b/d to 120,000 b/d in 18 months.

Kakap field is smaller and in shallower water than Kikeh, but wells in both fields have oil columns more than 1,000 ft thick and test-flowed in excess of 10,000 b/d/well.

Kakap, being unitized with Shell Malaysia’s 2004 Gumusut discovery on adjacent Block J, probably won’t begin producing oil until 2011. Development cost is two or three times that of Kikeh.

One of Murphy’s challenges is learning to make thin-bed oil pays commercial in deep water.

Wood noted that 14 of the 18 wells drilled in the Sabah Trough found hydrocarbons, but some are in high-quality sands just a few feet thick, mostly below seismic resolution.

Murphy’s Jangas, Kerisi, Senangin, and Siakap finds could have a combined 1 billion bbl of oil in place. A recovery factor can’t be calculated because the sands’ areal extent and vertical connectivity aren’t certain, Wood said.

One plan is to tie Kerisi back to Kikeh and produce it to check performance.

Sabah exploration

Elsewhere, Murphy has identified several 20-40 km-long structures, but it hasn’t yet determined whether finding a small amount of hydrocarbons at a single well condemns an entire structure.

From Kikeh, Murphy found that sands, not shales, contain the organic material in the Sabah Trough.

Like Kikeh, most of the play types are toe-thrust structures. Another operator has a discovery at one of only two wells drilled to test strat traps. Of three wells drilled for intraslope structural traps, one was a success. Subthrust success is one for three.

Murphy found hydrocarbons at Kikeh 7 Deep, not part of the field development and the only well in a large area to penetrate this deep section.

A carbonate interval that works in rift plays off China and the Philippines has not been tested off Borneo, and a shallower Pliocene play is also untried, Wood said.

Meanwhile, new 3D seismic data reveal prospects in 1,200-1,500 ft of water in deepwater Block H.

Sarawak oil and gas

Murphy has had 85% success in finding movable hydrocarbons with its wells off Sarawak, Wood said.

Output averaged 13,500 b/d net to Murphy’s 85% interest in 2005 from West Patricia and Congkak fields 25 miles offshore on Block SK 309. West Patricia is expected to recover 50-60 million bbl of oil.

Discoveries in 2005 at Endau and Rompin, containing oil in multiple reservoirs, are being examined for stand-alone development.

Meanwhile, Belum, Golok, Maharani, and Serampang found gas in multiple reservoirs in 2005. Another string of gas discoveries in 2006 on SK 309 and 311 included Pemanis, Serendah, Patricia, Wangsa, Tiram, and Sapih. Murphy plans to pipe this gas to the 23 million tonne/year Bintulu LNG facility starting in late 2008.

Golok field alone contains enough producible gas to supply the first tranche of a project agreed with Malaysia’s Petronas. Golok will feed up to 300 MMcfd for 12-24 months into a pipeline to Bintulu, with other fields coming on to maintain this flow for up to 15 years.

Murphy, with undeveloped gas finds at Kenarong, Pertang, and Pergau, has been less successful off Peninsular Malaysia but still has a large area of 3D seismic coverage that it hasn’t drilled.