Govt expects Niko to begin drilling deepwater prospects in mid year

By Godang Sitompul

The government expects Canadian oil and gas company Niko Resources Ltd to begin drilling exploration wells in the middle of this year. At present Niko holds the biggest total acreage of deepwater working areas in Indonesia.

The government now has high expectation that the company will be successful in the exploration after a number of major oil and gas companies hit dry holes recently. ?We have high expectation on Niko Resources. The company plans to begin drilling (exploration wells) in the middle of this year until next year,? Division Head for Oil and Gas Working Areas at the Directorate General of Oil and Gas, Naryanto Wagiman, told Petromindo.com.

He said the government has an interest to ensure that Niko is successful in its explorations program. If it failed, the government might need to review its strategies. ?We may need to add data and change the production sharing contract format for deepwater projects,? he said.

Naryanto however said that general survey for deepwater has been done and should be more than enough as basis for further exploration. ?The biggest challenge is the fact that most of the deepwater prospects in Indonesia are located in frontier areas. As a result, the cost to carry out explorations are expensive,? he noted.

Niko Resources holds interests in PSCs for 20 offshore exploration blocks covering 104,443 square kilometers. Its deepwater blocks are located in Sulawesi, Makassar Strait, North East Sulawesi, North West Papua and Sunda Strait.

The company has acquired a total of 29,570 kilometers of 2D seismic and 17,081 square kilometers of 3D seismic fulfilling its seismic work commitments so far. Eleven of the blocks have a single well commitment.

The company has earlier contracted a rig to begin drilling activities. The company has estimated the costs to fulfill the remaining work commitments at US$267 million to be spent at various dates up to December 2014.

Editing by Roffie Kurniawan