The drillship Deep Sea Ice is shown here on the Berau block off Irian Jaya, where ARCO drilled 11 appraisal wells-most offshore-for its Wiriagar/Berau find, renamed Tangguh by Indonesian President Suharto. Photo courtesy of ARCO.
ARCO has found a world-class natural gas field off Irian Jaya that consolidates the importance of Indonesia to the company's future while setting the stage for another major liquefied natural gas export project in that country.
- ARCO's Big Gas Strike Off Irian Jaya
ARCO's huge gas field off western Irian Jaya contains proved and probable reserves of more than 13 tcf of gas, making it one of the largest gas finds in recent history (OGJ, Sept. 8, 1997, Newsletter).
DeGolyer & MacNaughton, Dallas, which estimated the field's reserves, says additional reserves of 6.5 tcf are possible.
Previously known by its discovery well designations, Wiriagar and Vorwata, the field has been renamed Tangguh by Indonesian President Suharto.
Tangguh is the third largest petroleum discovery in ARCO's history, surpassed, in oil-equivalent terms, only by Alaska's Prudhoe Bay and Kuparuk River oil fields.
The find lies in the Wiriagar and Berau blocks, both onshore and offshore, although most of the field lies offshore in about 225 ft of water.
Appraisal drilling entails 11 ARCO wells and two earlier wells (OGJ, July 15, 1996, p. 74). ARCO will continue exploratory drilling to assess the area's ultimate potential.
Leon Codron, president of Atlantic Richfield Indonesia Inc., explained ARCO's presence in Indonesia: "In 1993, the government provided additional incentives for companies to engage in riskier frontier exploration in areas such as eastern Indonesia. The resulting improvement in contractor economics was a key factor in ARCO's decision to establish an active exploration program in Irian Jaya."
ARCO holds a 48% interest in the Berau block; partners are Occidental Berau of Indonesia Inc. 22.856%, Nippon Oil Exploration (Berau) Ltd. 17.144%, and KG Berau Petroleum 12%. ARCO holds an 80% interest in Wiriagar block, and KG Wiriagar Petroleum Ltd. holds 20%.
Development plans
ARCO is working with Pertamina on a declaration of commerciality for the field, which they expect to complete by mid-1998. ARCO Chairman and CEO Mike Bowlin said, "Natural gas developments, whether pipeline or LNG, rank very high on our global growth agenda. This is especially true in the Pacific Rim."The Tangguh field will support a major liquefied natural gas project that ARCO and Pertamina are planning in eastern Indonesia. The partners plan to begin LNG production before an anticipated demand increase by about 2003.
A multiple-train LNG plant is planned. The plant will be the first of its kind in eastern Indonesia, said Cod- ron.
Engineering of the LNG plant will be completed in mid-2000, when construction is scheduled to begin. The field development program will coincide with plant construction.
The partners will line up LNG sales and gas supply agreements during the next 2 years. Plant financing also will be arranged during that period.
"Irian Jaya is ideally located to service expanding Asian markets, where energy growth is forecast to remain robust," said Codron.
Indonesian state oil company Pertamina is the world's largest marketer of LNG and holds 50% of the Asian market. Indonesia has existing LNG gasification/export complexes at Arun and Bontang.
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