SKK Migas still evaluating fate of Kepodang field

By Godang Sitompul

Upstream authority SKK Migas is still in the process of evaluating the results of a recent assessment by the Center for Research and Development of Oil and Gas Technology (or Lemigas) on the condition of the Kepodang field, in Muriah block, offshore East Java, according to a source.

Once the evaluation is completed, SKK Migas will decide whether to approve an earlier request by Petronas, the block?s operator, to declare force majeure status of the Kepodang field as gas production level has fallen faster than expected, and reserves are seen to deplete sooner than initially projected.

The source, however, said that the Lemigas study confirmed an earlier suggestion that there has been overestimation of the Kepodang gas field reserves. The sources said that based on material balance analysis by Lemigas, the Kepodang in place reserves were estimated at only 107 bscf, which does not necessarily mean it can be entirely produced. In comparison, the Kepodang field plan of development (POD), approved by the government, states that the volume of hydrocarbon in the field that can be produced into gas totals 354 bscf.

Petronas Spokesman Andiono Setiawan declined to provide comments regarding the results of the Lemigas assessment. ?We?re still waiting (for the SKK Migas decision,? he said.

Petronas in July reportedly was requesting approval from SKK Migas to declare force majeure due to its inability to fulfill gas contract volume from Kepodang field to Tambak Lorok power plant owned by state electricity firm PT PLN.

SKK Migas said at the time that Petronas only managed to supply 70 mmcfd of gas from contracted volume out of 110 mmcfd contracted volume due to over estimation of the size of the field?s reservoir.

Petronas started flowing gas from Kepodang to Tambak Lorok power plant, which is located in Semarang, Central Java in 2015 under long-term contract that will end in 2026. Tambak Lorok has total generation capacity of 880 MW.

Petronas has 80 percent interest in Muriah with the balance held by Saka Energi.

Editing by Reiner Simanjuntak