Premier updates Indonesian ops
Thursday, March 13 2008 - 04:33 PM WIB
Natuna Sea Block A, Kakap PSCs
Premier?s core asset in Indonesia is in the West Natuna Sea, where it operates the Anoa field in Natuna Sea Block A (28.6667 percent interest) and is a partner in the Kakap field (18.750 percent interest). These fields supply gas under a long-term sales contract to Singapore.
In 2007, Premier sold an average of 137 British thermal units per day (BBtud) (gross) from the Anoa field and a further 66 BBtud (gross) from the non-operated Kakap field, under this agreement.
Gross oil and condensate production from these two fields averaged 2,498 barrels of oil per day (bopd) for Anoa (2006: 2,581 bopd) and 7,977 bopd for Kakap (2006: 6,998 bopd). Anoa is showing a slow natural oil decline as it matures, but with the potential for further drilling in 2009 to reverse this trend.
Kakap meanwhile has benefitted from the drilling of the Jangkar well in 2006, which enjoyed improved performance and a full year?s net production in 2007 of 1,495 bopd (2006: 1,312 bopd).
Overall net production from Indonesia increased to 12,000 boepd in 2007 (Anoa contributing 8,190 boepd and Kakap 3,810 boepd), compared with 11,550 boepd in 2006. The improvement is attributable to increased gas demand from Singapore and increased oil production on Kakap.
Gajah Baru development
On the Gajah Baru development, Premier met its 2007 goal to have definitive agreements in place for further gas sales from Natuna Sea Block A and retains its target to start producing this gas in 2010. Heads of Agreements were signed with Sembcorp Gas Pte Ltd for supply of gas to Singapore and with PLN Batam and PT Universal Batam Energy for domestic supply of gas to Batam.
Engineering work confirmed the development concept for the three fields supplying the gas, (Gajah Baru, Naga and Iguana) and a draft Plan of Development was submitted to the government.
Negotiations with the Singapore buyer were completed on 29 February 2008 and the current focus is on conclusion of ancillary agreements. Formal government approval of field development plans and award of major construction contracts are expected later in 2008.
Exploration
2007 saw three exploration wells drilled in Indonesia. In Natuna Sea Block A, the Ibu Lembu-1 well was drilled to prove the hydrocarbon potential in the adjacent up-dip structure to the 2006 Lembu Peteng-1 discovery. The well encountered gas in the primary target but following the running of an extensive data acquisition programme was plugged and abandoned as sub-economic. The second well, Gajah Sumatera-1 was drilled to appraise a potential extension to the Gajah Puteri field in Natuna Sea Block A.
While the well encountered some gas shows while drilling, wireline logs indicated that no significant hydrocarbons were encountered and the well was plugged and abandoned. Further technical studies are being carried out in the area to define the hydrocarbon-bearing sand distribution proven by adjacent wells.
The Pancing-1 well was drilled in the Kakap Block to test a deep structure close to existing infrastructure. The well flowed oil although at sub-economic rates, however the well?s results are significant in encountering hydrocarbons in an under-explored play in the area, raising the possibility of further exploration potential.
2008 exploration activities within Natuna Sea Block A will focus on maturing and high grading the existing prospects and leads for an anticipated 2009 drilling programme.
North Sumatra Block A PSC
Premier completed the joint acquisition with Medco of ConocoPhillips? 50 per cent share of North Sumatra Block A in January 2007, bringing interest to 41.667 per cent.
Negotiations to sell gas from the undeveloped Alur Siwah, Alur Rambong and Julu Rayeu fields progressed well through the year culminating in a December signing of a Gas Sales and Purchase Agreement to two fertilizer plants owned by PT Pupuk Iskandar Muda (PIM), a state-owned entity, for the delivery of 110 BBtud for seven years. A second gas sale to PLN for local electricity generation is progressing well with an expectation of completing agreements in the first quarter of 2008. Development studies were ongoing through the year with a Plan of Development submitted in December. Project sanction is anticipated by mid-2008.
Buton PSC
Technical studies including field mapping and sampling took place on the Buton PSC on the southeastern side of Buton Island, Sulawesi, with the aim of firming up multiple leads originally identified from satellite imagery. Towards the end of the year a contract was awarded for the acquisition of 265km of 2D seismic data across the block.
The survey commenced in January 2008 and is expected to take approximately six months to complete. The data will help to high grade the acreage and focus on identifying a high impact drilling opportunity for 2009. Premier has a non-operated 30 per cent equity interest in the block.
Tuna PSC
In March Premier was awarded a 65 per cent operating equity interest in the Tuna PSC in the North East Natuna Sea. The block covers 4,992km2 and lies south of Premier?s operated Block 07/03 and Block 12W in Vietnam and to the east of the Natuna Sea Block A and Kakap PSCs in Indonesia. The Tuna PSC represents an underexplored area in the middle of a region in which Premier has a strong technical understanding. Multiple leads have been identified which will be followed up in 2008 with the acquisition of new seismic data leading to the drilling of two wells on the block. (end of excerpt)