Govt awards unconventional PSC in North Sumatra
Tuesday, July 8 2014 - 02:21 AM WIB
ASX-listed New Zealand Oil & Gas announced on Tuesday that the Indonesian government had awarded the right to explore the unconventional oil and gas resources in North Sumatra to a consortium in which the company has an 11.25 per cent interest.
The company said in a press release issued on Tuesday that the MNK Kisaran production sharing contract (PSC) in North Sumatra is one of the major oil producing basins in South East Asia. The PSC covers a substantial sub-basin in the same area as the conventional Kisaran production sharing contract where the consortium partners last year successfully drilled for oil and gas. A plan of development for that discovery is currently being prepared, and is expected to be approved later this year.
The MNK Kisaran partners are New Zealand Oil & Gas with 11.25 percent interest, Bukit Energy with 33.75 percent interest, and Pacific Oil & Gas with 55 percent interest.
The MNK Kisaran PSC is one of the first PSCs for unconventional oil and gas resources issued in Indonesia. It is the first time New Zealand Oil & Gas has had exposure to prospective oil and gas resources that qualify for Indonesian government?s concessional terms.
The unconventional resources are oil and gas which are trapped in rocks, but the rate of production is severely limited by low permeability. Commercial development of some of these types of rock has been made possible by new extraction technology, particularly in North America.
The consortium will study the effective application of these technologies onshore Sumatra over the next three years. The consortium?s three-year exploration work commitment includes geological and geophysical studies during the first and second year and drilling a vertical exploration well at the third year.
Editing by Benget Besalicto ST