Unocal indicates favorable Gehem appraisal drilling result

US independent oil company Unocal Corp. said it was currently drilling Gehem 2 appraisal well offshore East Kalimantan. Gehem was a gas discovery the company had last year in deepwater of Makassar Strait.

?This well is a deeper test as well as an appraisal test of the gas. We are not ready to announce the results, but I will tell you it is certainly a successful appraisal well. We are still on the well. We have partners and confidentiality issues. We?ll put a release out probably within the next two weeks,? Chuck Williamson, Unocal chairman and CEO in a conference call held Friday broadcasted through the company?s website.

Williamson said Unocal is proceeding with its fast-track plan for development of the Gehem field.

Unocal?s earlier estimate put Gehem?s range of reserves at 2-3 trillion cubic feet of gas. Gehem is set to become gas supplier of Bontang LNG plant with production commencement seen in 2006-2007.

Unocal has 80 percent working interest in ganal PSC, where Gehem field is located, with Itialian oil company ENI SPA holds the remaining 20 percent.

Williamson went on to say that after completing Gehem 2, Unocal commence appraisal drilling program in Gula discovery, also in deep-water of Makassar Strait, with gas reserves estimate of 1.1-7.3 TCF.

?For the rest of the Indonesian program this year, we?ll test our new PSCs where we?ve had no wells drilled, which lie outboard of the discoveries we?ve made. Then we are planning a deep Ranggas well that will test for deeper oil that we had found potential in from some of our earlier wells,? said Williamson.

Unocal is planning to spend US$60 million on Indonesian exploration programs this year.(alex)