Pertamina approves Andalas? TOE technical contract
Wednesday, August 10 2016 - 08:09 AM WIB
LSE-listed Andalas Energy and Power Plc, the AIM listed Indonesian focused oil and gas exploration company, said that PT. Pertamina had approved the company?s Tuba Obi East (TOE) Technical Assistance Contract in Jambi Province proof of concept work program.
The company announced in a press release on Wednesday that the first step in this program will be the recompletion of the existing TOE-1 well and production testing of the gas bearing Air Benakat Formation (ABF).
?Over the past two months we have been working closely with Pertamina and our joint venture partner, PT Akar Golindo, to determine the most cost effective way to evaluate the gas in ABF at Tuba Obi East. Pertamina has recognized the significant potential of the ABF gas, its close proximity to a high demand energy market, and that the proof of concept work program will quickly and efficiently assess the gas quality, quantity and deliverability,? Andalas CEO David Whitby said.
He added that the TOE proof of concept program is in line with Andalas? strategy to develop a gas-to-power business while contributing at the local level to the Indonesian government?s objective of decreasing the country?s power shortfall.
The approved program will also reduce near-term costs by around 60 percent, allowing the company to gather crucial subsurface data weeks earlier while simultaneously avoiding any potentially lengthy land acquisition delays.
The TOE field contains three existing wells that intersect the gas bearing ABF. The recent extensive subsurface technical review has identified the centrally located TOE-1 well as the best candidate for recompletion and testing of the gas in the zone.
As part of the re-entry program well casing integrity will be assessed; the well will then be recompleted to the shallower ABF; a multi-rate production test will then assess formation productivity; and pressurized gas samples will be collected for laboratory quality testing.
The information gathered by the program will contribute to better selection of location for future delineation and development wells and support gas processing and power plant front-end engineering (FEED) and design studies. It will also enable the joint venture to complete a gas reserves assessment and commence gas and power sales negotiations.
The TOE oil and gas concession area is located in the Jambi province in Sumatra, approximately 30 km north-west of Jambi city. The concession covers an area of 55 sq km in the South Sumatra basin and is close to the major Sumatra gas pipeline to Duri and Singapore.
TOE was discovered in 1986 and to-date three wells have been drilled on the concession, with current production of light, sweet crude oil on an intermittent basis from one well. All three wells tested near pipeline quality gas in the key South Sumatra hydrocarbon bearing formations, namely, the ABF and TAF. In April 2016 Gaffney Cline & Associates reported Best Estimate Gross Prospective Resources of 43.7 billion cubic feet (Bcf) of gas in the ABF upper and lower reservoirs within the TOE structure.
Of the six wells that have been drilled through the gas bearing zones (three wells within the concession and a further three just outside), several have flowed gas to surface at rates up to 3 million cubic feet per day (MMscf/d) of gas. Crucially, the ABF has flowed gas outside the concession at commercial rates, but only limited data from this formation has been gathered within the concession area.
Editing by Benget Besalicto ST