Medco advised to extend exploration of Madura Block
Tuesday, February 17 2004 - 02:02 AM WIB
?The Madura block is hydrocarbon bearing with potential commercial accumulation with unrisked gas resources in the order of 1.2 trillion cubic feet in 4 prospects namely, Sebaya, Arosbaya, Telaga and Tembuku,? GCA said in its report to Medco and partners.
GCA has carried out a comprehensive multidiscipline study on the block's prospects at the request of the joint operating body (JOB) which owns the block. The block is operated by Medco.
The exploration license held by Madura JOB expire on May 15, 2004. Medco and partners should thus decide whether to relinquish the block or to commit to further exploration and exploitation activities.
"Extend the relinquishment date by a minimum of at least one year," GCA recommended.
According to GCA's report, the central fault block of the Sebaya prospect is estimated to contain about 155 billion cubic feet (BCF) of recoverable gas, more than enough for the power market in Madura.
?A ten year volume commitment will likely be required from the Gili power plant. For full conversion of the Gili power plant, this commitment amounts to approximately 80 BCF,? GCA said.
GCA said Medco and partners should obtain a letter of intent for gas sales to the power plant upon the acceptance of their proposal by upstream authority BP Migas.
GCA also advised that Medco should drill two appraisal wells (1 firm and 1 contingent on the firm well) on Sebaya prospect. ?Drilling operations must be carefully carried to minimize formation damage,? GCA added.
State oil and gas firm Pertamina has 35 percent interest in the Madura block, while CityView, Medco and Falcon Oil Pte. Ltd hold 16.25 percent, 24.75 percent and 24 percent, respectively. (robert)