RH Petrogas updates Indonesian ops
Thursday, April 14 2016 - 02:30 AM WIB
Basin and Island PSC, west papua (working Interests: Basin 60%, operator; Island 33.2142%)
The Kepala Burung PSC (Basin PSC) and the Salawati Kepala Burung PSC (Island PSC) are two contiguous blocks located in the ?Bird?s Head? area of West Papua in eastern indonesia, covering a total area of 1,969 square kilometers (km2) with both onshore and offshore acreage. The Group has an aggregate working interest of 60% in the Basin PSC and 33.2142% in th island PSC. Based on an independent third-party assessment, the proved plus probable reserves (2p reserves) as at 1 January 2016 for the two PSCs combined was 6.4 million barrels of oil equivalent (MMBoe) net to the Group?s working interests. These reserve numbers include the indonesian Government?s share of production under the terms of the PSCs.
Production for 2015 averaged 4,200 barrels of oil equivalent per day (?BoepD?) net to the Group?s working interests. This is slightly lower than the 4,370 BOePD achieved in the previous year, with the decrease due mainly to natural field decline and the deferment of new development well drillings in view of the low oil price environment.
On 1 January 2016, the Group through its wholly owned subsidiary Petrogas (Basin) limited (PBL) assumed the rights to operate the Basin PSC from PetroChina international (Bermuda) ltd. The operatorship transfer process began as early as in October 2015. As the operator, the Group will be in a better position to strategise and formulate future plans of the Basin block. Given the current low oil price environment, one of the key challenges and priorities for the Group is to improve the operational and cost efficiency of the block. in this respect, PBl has embarked on several cost cutting programs including re-negotiating with vendors and service providers to reduce costs. The team is also reviewing and redesigning existing business and operating processes to streamline operations while targeting further increase in oil and gas production. To facilitate planning and implementation of longer term investment and optimisation strategies for the block, one of the key strategic goals of the Group is to accelerate the review and application of the extension of the Basin PSC beyond its current expiry in 2020.
Basin PSC
The plan of development (POD) for the North Klalin gas field was approved by SKK Migas (Satuan Kerja Khusus Pelaksana Kegiatan usaha Hulu Minyak dan Gas Bumi) in February 2015. The POD program consists of the drilling of four development wells and the construction of flowlines tying back to existing production facilities within the Basin block. Part of the North Klalin gas will be used internally as fuel for operations, while the rest would be supplied into the domestic market to feed the growing gas demand in the Sorong area in West Papua. The Group is reviewing marketing options for the gas and development drilling will commence when it becomes commercially attractive to do so.
During 2015, well work-overs were carried out on five wells to improve well performance, which yielded varying degrees of success. The Group is also currently re-evaluating the subsurface interpretation of the block with main focus on the Walio field as a pilot project. The Walio field has significant remaining oil reserves and thus holds good potential to increase oil production for the block. Results of this study will help the Group in the design and implementation of a detailed work programme to enhance production through well work-overs and drilling of infill wells. if this pilot project is successful, similar studies will be rolled out to other fields within the Basin block such as Kasim, Jaya, Cendrawasih, and Wakamuk fields. The total expenditure incurred for the well work-over program and other development activities in 2015 was approximately US$5,110,000. As previously updated, the production tests of the Klaifi-1 well which was successfully completed in 2014 recorded an average production of 251 barrels of oil per day (BOPD) with 91% water cut. With the good production rate, a proposal to put on production (pop) the well was submitted to SKK Migas in December 2014. The oil to be produced from the well will be trucked to the nearest facilities in Arar area. The development project had been deferred due to prevailing low oil prices. The Group believes that the Klaifi-1 well performance has opened up potential new exploration plays in the eastern part of the Basin PSC. The Group will re-visit the project to formulate further studies and development program in that area at an appropriate time.
Island PSC
Following the offshore oil discovery at Koi-1 well drilled in the year 2000 and the successful appraisal made by the Koi-2 well in 2014, the joint venture partners of island PSC have commenced a preliminary Front end engineering Design (?pre-FeeD?) and reservoir simulation studies of the Koi field. Both studies were completed in the second half of 2015 and are currently being reviewed by partners. The results will be taken into consideration to determine the feasibility of proposing a POD for the offshore field?s development.
in July 2015, the offshore TBA field was reactivated after a new FPSO (Floating Production Storage and Offloading) vessel was successfully installed on site. TBA production was suspended in 2010 following the expiration of the old FPSO contract. Field reactivation began with intermittent flow of around 1,000 BOPD from July to September 2015. After the installation of gas lift system in October 2015, production rates more than doubled to around 2,100 BOPD. The FPSO contract will end in July 2016 with an option to extend for another 6 months. in view of the sharp drop in oil prices recently, the partners are currently re-evaluating the TBA project to determine further course of actions.
In the meantime, the team will continue to conduct well services to maintain onshore production in the island PSC. The total expenditure incurred for the well services in 2015 was approximately US$145,000. (end of excerpt)