Salawati basin activity building in, off northeastern Indonesia

Aug. 1, 2005
A group led by PetroChina International subsidiaries is building oil and gas reserves in the Salawati basin of northeastern Indonesia.

A group led by PetroChina International subsidiaries is building oil and gas reserves in the Salawati basin of northeastern Indonesia.

The group operates two contract areas that extend to the year 2020. The Salawati Island Joint Operation Body contract covers 1,097 sq km on and offshore, and the Salawati Basin PSC covers 872 sq km onshore in western Papua Province.

Production from Salawati was slightly below expectations in 2004, but several exploration successes that year and a continued exploration and development program this year should have a positive effect, said Lundin Petroleum AB, Stockholm, a participant in both contract areas.

The group plans to start northeastern Indonesia’s first offshore oil production in the fourth quarter of 2005 from Teluk Berau A (TBA) field on the Ceram Sea shelf.

Pearl Energy Ltd., Singapore, and Indonesia’s state-owned Pertamina also participate in both contract areas.

Numerous prospects and large unexplored areas remain on both blocks, Lundin Petroleum said.

Teluk Berau A field

Next to start production is TBA field in 130 ft of water 50 km southwest of Salawati Island.

TBA was discovered in the 1970s but remained undeveloped. The group completed the TBA-4 and 3 delineation wells in March and May, 2005, respectively.

TBA-4 flowed 4,225 b/d of oil and 4.9 MMcfd of gas from 7,000-7,200 ft, and TBA-3 flowed 4,800 b/d and 3.1 MMcfd from 7,400-7,500 ft. Equipment capacity limited the flow rate from both wells.

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The group expects to recover 5.3 million bbl of 59° gravity oil from the Miocene Kais reefal limestone. A minimum facilities platform to support the two wells will be tied into a floating production, storage, and offloading vessel. Lundin Petroleum said its incremental net production from the field is expected to exceed 1,000 b/d.

Interests in the Salawati Island PSC are PetroChina International Kepala Burung Ltd. 16.79%, Pertamina 50%, Pearl Oil (Island) Ltd. 18.7%, and Lundin Petroleum 14.51%.

Lundin also has interests in the Sareba concession in Papua, the Banyumas and Blora concessions on Java, and the Lematang concession on South Sumatra. The company’s 2004 net production in Indonesia was 2,296 boed, almost all of which came from the Salawati basin onshore fields.

Salawati E&D

The group planned to drill 5 exploration wells on the block in 2005, but no results were available at press time.

Four fields are on production: Main Matoa, Matoa-20, Matoa-29, and Southwest “O.”

Near TBA field offshore is the undeveloped the TBC discovery with possible gross reserves of 5.4 million bbl of condensate. Nine offshore prospects with combined potential of more than 300 million boe have been identified on 2D seismic data.

The 2004 drilling program included Neo-1, which found 12 bcf of gas and 500,000 bbl of condensate in a Kais reef. A development plan calls for the gas to be injected into the Matoa-3 well.

NE Aja-1 found 27.6 bcf of gas plus unspecified condensate and awaits a gas use-marketing strategy.

Matoa-34 tested oil in a satellite structure of Matoa field and was tied back to existing infrastructure.

This drilling followed a 2003 program of 285 sq km of 3D seismic and 60 line-km of 2D seismic on land.

Meanwhile, Walio, Kasim, Jaya, and Cenderawasih oil fields are producing in the southern area of the Salawati Basin PSC, and Arar, Klalin, and Terumbu oil and gas fields are producing in the northern area. The 2005 plan calls for drilling 15 infill wells.

The 2004 drilling resulted in discovery of Wakamuk field, a modest oil discovery that was tied to existing facilities.

Four 2005 exploration wells are planned, and the group was studying the possibility of accelerating exploratory drilling on the Arar Block, where large potential is thought to remain.

Lundin reported 11 million boe net to its interests on both blocks as of early 2005.

Pearl Oil 51% and Genting Bhd. 49% hold the 4,873.5 sq km West Salawati Block mostly offshore west of Salawati Island.