Indonesia's oil and gas sector is thought by the industry to be relatively mature, but there is still significant potential to prove up further reserves.
This is the view of Wood Mackenzie Consultants Ltd., Edinburgh, which said that, while oil discoveries have been "relatively uninspiring" in recent years, frontier gas finds have boosted Indonesia's reserves significantly.
"From a total of 28 billion boe of reserves in 1990," it said, "our analysis shows that reserves had increased by more than 13 billion boe by January 1998. Reserves additions have occur- red in both liquids and gas, although gas has been dominant in recent years. A significant proportion of the reserves discovered were in frontier areas, in particular Irian Jaya."
More than 60% of the increases in gas reserves during 1990-98 was attributed to discoveries vs. only 15% of oil reserves added through exploratory drilling.
"Reserve creep has played a major role in the replacement of liquids reserves over the period," said Wood Mackenzie. "This is mainly due to the success of the steamfloodellipseoil recovery project in Duri field. Reserve creep has also contributed to an increase in oil and gas recoverable reserves on the Sanga Sanga and offshore Mahakam production-sharing contracts."
Among key discoveries, the analyst cited the 1994 disclosure by ARCO of its Wiriagar Deep find on Wiriagar block off Irian Jaya. The find has estimated reserves of 5.1 tcf of gas and 20 million bbl of condensate and is being developed to supply Indonesia's Tangguh liquefied natural gas export scheme. Another major find was ARCO's 1997 Vorwata discovery, with estimated gas reserves of 12 tcf, also earmarked for development under the Tangguh LNG project.
"Despite being regarded by many as a mature province," said Wood Mackenzie, "Indonesia has replaced produced hydrocarbons in the 1990s.
"However, it is unlikely that this trend will continue for liquids, since the potential for significant future oil discoveries is limited and reserve creep in areas such as Southeast Sumatra and offshore Northwest Java has declined significantly.
"There is also the potential of reserves additions via marginal field developments. It has been suggested that a further 1 billion bbl of oil could be moved into the commercial category, if terms are adjusted suitably.
It is likely that more gas reserves remain to be proved up in Indonesia, as long as there is a market to support further exploration. In the short term, the lack of a market could have a major impact on exploration. However, on a longer-term basis, the potential should be realized, given that gas is underutilized in the domestic market."
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