Contractors to spend $600m to drill Makassar Strait wells

Six international oil, gas firms will spend at least US$600 million to drill at least 12 wells in the deep sea of Makassar Strait in 2009/2010 in a bid to tap vast hydro carbon potential in the area.

Doug Pirie, Vice President Drilling of Marathon International Petroleum Indonesia Limited, a unit of US oil firm Marathon Oil that operates Pasang Kayu block told reporters on Tuesday that cost to drill one well in the area, where water depth vary from 500-2,000 meters, could reach $ 50 million.

The blocks? operators, led by Marathon, had formed a consortium to procure drillship for the campaign and had secured Transocean?s GSF Explorer, which is expected to start drilling by the fourth quarter of 2009. Pirie said that even tough Marathon is acting as lead operator for the group; each consortium member is responsible for their own committed wells.

According to Pirie, the consortium will pay US$360 million for GSF Explorer?s two-year service or at the daily rate of $510,000.

The consortium members are: Anadarko Petroleum (operator of Popodi Block), ConocoPhillips (Kuma block), Eni (Bukat block), Marathon Oil (Pasang Kayu block), StatOil (Karama block) and Talisman Energy (Sageri block).

Pirie said the drillship will first drill one well at Popodi block, followed by another one in Pasang Kayu and two in Karama.

Pirie said the consortium had option to extend GSF Explorer?s contract by one year should the drilling campaign successful. (alex)