AAL joint venture to amend POD, delays FID

By Romel S. Gurky

ASX-listed AWE Ltd said on Friday that final investment decision (FID) for the Ande Ande Lumut (AAL) oil project, within the Northwest Natuna PSC in the Natuna Sea, has been delayed again to 2018 as the joint venture is now considering a government proposal to jointly develop the G sand and K sand reservoirs from field startup.

?This would require a significant amendment to the approved K sand POD (plan of development) and would likely result in FID being moved into 2018, but the overall economic benefits to the project are significant,? AWE said in a statement.

AWE owns 50 percent interest in the Northwest Natuna PSC. While the other half is owned by operator Santos Ltd. AWE said in July of last year that the AAL FID was expected to be made in first semester of 2017, a delay from initial target of mid-2016, and first oil in 2020.

AWE said the additional volumes associated with the G sand reservoir are likely to further enhance project economics.

To allow time to quantify the size of the G sand resource and integrate these potential positive changes to the POD, the operator has temporarily delayed the start of Stage 2 commercial tenders to select contractors for the FPSO and WHP.

?Work continues on optimization of the field development plan in light of the positive results from the AAL-4XST1 appraisal well with a focus on assessing G sand resources. Laboratory work to assess feasibility of co-mingled production of K sand and G sand oil is looking positive and no significant changes to the FPSO processing infrastructure are anticipated,? AWE said in the statement.

Editing by Reiner Simanjuntak