Indonesian oil and gas regulator SKK Migas confirmed a natural gas discovery at the Repsol-operated Sakakemang PSC onshore central Sumatra. Repsol started drilling the Kali Berau Dalam-2 well in August 2018, targeting a fractured Pre-Tertiary basement play. The company reentered the well earlier this month following control problems in late 2018, according to consultant Wood Mackenzie.
Before drilling, the prospect was estimated to hold about 1.5 tcf of gas, or more than 250 million boe. “Further appraisal will be required to determine the extent of the discovery and firm up resource estimates,” WoodMac said, adding, “with another well scheduled on the block for later this year.” Local press reported production tests under way at a rate of 45 MMcfd.
WoodMac estimates any reserves larger than 300 bcf would be considered commercial, given proximity to gas infrastructure. The discovery is just 25 km from the Grissik gas plant, which gathers and processes production primarily from ConocoPhillips-operated Corridor PSC, before sending it to buyers in Sumatra, West Java, and Singapore. “Besides operator Repsol, which holds a 45% stake in the discovery, the news is very encouraging for the other PSC partners, including Petronas, which farmed into the block for 45% in January, and Moeco, which holds 10%,” WoodMac said.
ConocoPhillips and Pertamina will also be interested in the result, according to the consultant, as they look to extend the life of the Corridor PSC, scheduled to expire in 2023. The Corridor PSC is a key supplier of gas to Singapore and West Java but is expected to see declining output from 2024, WoodMac said.
“SKK Migas has recently upped its efforts to encourage exploration in the country as it faces dwindling output and a lack of new investment activity,” WoodMac said. “The regulator has targeted the discovery of at least one new giant field (500 million boe) by 2023. The Kali Berau Dalam discovery could be the good news Indonesia needs to kick-start its exploration sector. If predrill estimates are realized, it would be the largest discovery in Indonesia since ExxonMobil’s Cepu discovery in 2001,” WoodMac said.
Repsol owns mineral rights to five exploration and production blocks in Indonesia, covering a net surface area of 12,480 sq km. Net 2017 production totalled 600,000 bbl of liquids and 80.3 bscf of gas (a combined 40,881 boe/d), largely from Corridor in which the company has a 36% non-operated stake.
