Pertamina scales back Donggi development plan due to disappointing exploration result

State-owned oil and gas company Pertamina will delay talks with its foreign partner on developing the Donggi gas prospect in Central Sulawesi due to disappointing delineation drilling results, a company official said.

?Based on the latest delineation results, reserves estimation in the existing prospect was below expectation. That forces us to scale back our planning to at least one year and we must plan further drilling campaign to increase the reserves,? said company president Baihaki Hakim on the sidelines of a parliamentary hearing in Jakarta Tuesday.

Baihaki said the latest estimate on Donggi?s recoverable gas reserves was below 4 trillion cubic feet (TCF), lower that earlier estimate of around 8-9 TCF.

Pertamina had held talks with U.S.-based Marathon Oil to develop LNG plants in Donggi and to export the product to the United States. ?This development will delay talks with Marathon for at least one year, until we could discover more reserves,? Baihaki said.

Generally, around 10 TCF of reserves was needed to justify development of LNG plant with a capacity of around 7 million tons per annum.

Meanwhile, Pertamina?s acting upstream director Eteng A. Salam said Pertamina would revise its drilling campaign in Donggi this year by relocating more drilling sites toward offshore of the block. Eteng said Pertamina would drill five exploration blocks towards the end of this year.

?That would mean we must spend more for exploration drilling, since drilling in offshore area is far more expensive,? said Eteng

He also added that Pertamina had hired DeGolyer & MacNaughton and state oil and gas research institute (Lemigas) to jointly certify reserves in Donggi. (alex/godang)