Kodeco, CNOOC strike gas in E. Java

Korea Development Company Energy (KODECO Energy) and partner China Offshore Oil Corporation (CNOOC) have discovered a significant natural gas reserve in West Madura PSC west of Madura Island, The Jakarta Post reported Saturday.

KODECO Energy chairman Choi Gye Wol told The Jakarta Post that the gas reserve, which is estimated to hold 15 million barrels of oil equivalent worth approximately US$300 million at current prices, was found early this month at the KE 32-1 well of the West Madura offshore block.

"It was a surprise find," Choi remarked.

Since late 2001, after it established a partnership with CNOOC, KODECO has been producing crude oil at about 15,000 barrels of oil per day (bpd) and about 100 million standard cubic feet (MMSCFD) of gas per day. KODECO's total oil and gas production is about 30,000 bpd oil equivalent.

Aside from the Madura PSC, the firm has also a stake in the Poleng TAC, located in the waters north of Madura.

CNOOC gained a 25 percent interest in Madura and 50 percent in Poleng following its acquisition of all the Indonesian assets of Spanish-Argentinean energy giant YPF-Repsol.

Prior to the discovery of the KE 32-1 well, based on calculations approved by independent consultant Ryders & Scott, the combined proven oil and gas reserves at the Madura and Poleng blocks could generate $1.6 billion in revenue from 2002 to 2013, while probable reserves in both blocks could produce up to $3 billion in revenue from 2003 to 2017.

Aside from adding to KODECO's and CNOOC's hydrocarbon assets in the country, the discovery of the new well could also ease gas shortages that have been troubling East Java for several years.(*)