Chevron updates Indonesian oil, gas ops
Thursday, April 1 2010 - 08:24 PM WIB
Working Areas
Chevron?s operated interests in Indonesia are managed by several wholly owned subsidiaries, including PT Chevron Pacific Indonesia (CPI), which operates a 100 percent interest in the Rokan and Siak PSCs and a 90 percent interest in the Mountain Front Kuantan (MFK) PSC on the island of Sumatra. Chevron?s interest in MFK was extended by the government in January 2010. Transition to a local operator is expected by mid-2010.
Chevron also holds operated interests in five offshore PSC areas covering approximately 3.2 million acres (13,000 sq km). Four PSC areas are located offshore East Kalimantan in the Kutei Basin, including operated interests in East Kalimantan (92.5 percent), Makassar Strait (90 percent), Rapak (80 percent) and Ganal (80 percent). Under the terms of the Rapak and Ganal PSCs, the company is required to farm-in an Indonesian partner during 2010, which will reduce the company?s ownership interest in Rapak and Ganal to 72 percent.
The fifth PSC is a 100 percent-owned interest in East Ambalat, located in the Tarakan Basin offshore northeast Kalimantan. Chevron?s interests in two onshore exploration blocks in western Papua, West Papua I and West Papua III, are expected to be reduced to 51 percent in 2010 following approval of the farmout by the government of Indonesia. Approval is expected to be granted prior to completion of geological studies and initiation of 2-D seismic data acquisition planned for the second-half 2010.
Chevron?s nonoperated working interests include the NE Madura III Block (40 percent) located in the East Java Sea Basin and the offshore South Natuna Sea Block B (25 percent) located northeast of the Rokan Block.
Total daily production in 2009 from all producing areas in Indonesia averaged 485,000 barrels of liquids (199,000 net) and 611 million cubic feet of natural gas (268 million net).
CPI
Production. Total daily production averaged 384,000 barrels of crude oil (171,000 net) and 49 million cubic feet of natural gas (49 million net) in 2009.
During 2009, the majority of CPI?s production came from fields under primary or secondary recovery within the Rokan PSC. Duri is the largest producing field in the Rokan PSC. Duri has been under steamflood since 1985 and is one of the world?s largest steamflood developments. In 2009, 80 percent of the field was under steam injection, with total production averaging 188,000 barrels of crude oil per day (108,000 net).
The remaining production from the Rokan PSC is in the Sumatra light-oil area, consisting of more than 90 active fields that averaged 196,000 barrels of liquids (62,000 net)and 48 million cubic feet of natural gas (48 million net) per day in 2009. During 2009, 142 wells were drilled in this area. The Rokan PSC expires in 2021.
Development. CPI continues to implement projects designed to sustain production, increase recovery and improve reliability from existing reservoirs.
In Area 1 through Area 11 of the Duri Field, 185 production and 40 steam injection wells were drilled during 2009. Development also continued in the northern region of the field, where approximately 110 million barrels of crude oil are estimated to be potentially recoverable. The development plan includes projects focused on sequential development of two northern expansion areas ? North Duri Development Area 12 and North Duri Development Area 13. The Area 12 expansion achieved first steam injection in June 2009 and was expected to continue ramp up of steam injection through 2010. During 2009, 216 production and 92 steam injection wells were drilled in Area 12. A maximum total production of 34,000 barrels of crude oil per day is expected in 2012. Also in 2009, Area 13 technical work was completed with a review of the final investment decision expected by the end of 2010. Development alternatives for Area 14 are under evaluation.
In the Minas Field, 72 production wells were drilled during 2009, and efforts continued to optimize the waterflood program to sustain field production. Execution of the pilot project for a chemical injection process that could further improve recoverability in Minas and surrounding fields continued.
Exploration. The 2009 exploration program focused on lower-risk reservoirs in Rangau, Kiri and Aman troughs in the Central Sumatra Basin. A well drilled in the fourth quarter 2009 resulted in a discovery in the Rokan Block. The Siak Block evaluation program included an exploration well, which was drilled in December 2009 and resulted in a dry hole.
Kutei Basin, East Kalimantan
Production. During 2009, total daily production from the Kutei Basin averaged 32,000 barrels of liquids (18,000 net) and 181 million cubic feet of natural gas (131 million net). Chevron operates 15 producing fields offshore. Crude oil and natural gas produced from the northern fields are processed at the company-operated Santan terminal and liquids extraction plant. Natural gas is transported by pipeline to the state-owned Bontang LNG plant and to a fertilizer, ammonia and methanol complex. Crude oil and natural gas from the southern fields are sent to the company-operated Lawe-Lawe terminal. The stored crude oil is either exported by tanker or transported by pipeline to the state-owned Balikpapan Refinery. The natural gas is transported by pipeline for use as fuel gas at the Balikpapan Refinery.
Development. The company advanced the development plan during 2009 for its Gendalo-Gehem deepwater natural-gas project. FEED commenced in December 2009, but completion is dependent on government approvals and achievement of key milestones.
The maximum total daily production is expected to be 1.1 billion cubic feet of natural gas and 31,000 barrels of condensate. The deepwater Bangka Project was also progressed in 2009 under an updated development concept designed to lower project capital requirements and is scheduled to move into FEED in the second quarter 2010.
In late 2009, the company began pursuing a partial farm-out of the PSCs, which include the Gendalo-Gehem and Bangka projects. If successful, the farm-out is anticipated in late 2010. At the end of 2009, proved reserves had not been recognized for either of these projects.
In the shelf area, Chevron also continued work on several developments and drilling in 2009. First gas from the Seturian Field was achieved in September 2009. The project is designed to supply natural gas to the Balikpapan Refinery. Also in 2009, a decision was made to suspend the evaluation of the 50 percent-owned and operated Sadewa Project based on the limited remaining PSC life.
East Java Sea Basin
Exploration. A third obligation well in the nonoperated NE Madura III Block was drilled in 2009 and resulted in a dry hole. Due to the results of this well and the previously drilled exploration wells, the company expects to reach an agreement with the government by the end of 2010 to settle its obligation to participate in three additional exploration wells.
South Natuna Sea Block B
Production. Block B production is from seven natural-gas fields and four fields that produce both crude oil and natural gas. Total daily production during 2009 averaged 69,000 barrels of liquids (10,000 net) and 382 million cubic feet of natural gas (88 million net).
Block B has a five-phase development project to support two long-term natural-gas sales contracts to Malaysia and Singapore. Drilling for the initial three development phases continued through 2009. The North Belut development project, the fourth phase of the Block B development, achieved first gas in November 2009. Additional development drilling in the North Belut Field is planned to continue through 2010. Maximum daily production is expected to reach a total of 200 million cubic feet of natural gas and 20,000 barrels of liquids in 2010.
Development. Alternatives for Block B?s fifth development phase, the South Belut development project, were under review during the year. (end of excerpt)