ASIA/PACIFIC

Robert Delmar
Jakarta

Indonesia-Singapore pipeline finalized

Conoco and partners have finalized a deal for the construction of a 28-in., 300-mile subsea pipeline to transport gas from the West Natuna gas fields off Indonesia to Singapore. The pipeline will be capable of transporting 325 MMcf/d of gas to Pulau Sakra, Singapore where it will be used chiefly for fueling power plants. The gas supply contract is set for a term of 22 years and will involve the sale of $8 billion in natural gas.

The pipeline is scheduled to be completed in 2001 and will mark the first international sale of pipeline natural gas from Indonesia, as well as being the largest international natural gas supply and delivery system in the Asia-Pacific region. The gas produced will come from West Natuna Sea fields operated under PSC's by Conoco Indonesia (Block B), Gulf Resources (Kakap Block), and Premier Oil Natuna Sea (Block A). Conoco will operate and manage the construction of the pipeline along with partners Pertamina, state oil company of Indonesia, and a consortium led by Sembawang Engineering and Construction of Singapore.

Unocal/Mobil to fast-track Indonesian deepwater

Unocal and Mobil have opted for the fast-track development of the deepwater West Seno oil and gas field in the Makassar Strait PSC offshore East Kalimantan, Indonesia. Following successful exploration and delineation drilling, the companies have estimated recoverable reserves for the field at around 150 million bbl, and between 210 and 720 million boe for the greater Seno structure.

The development plan for West Seno will be submitted early in the second quarter and marks the first of the joint venture's deepwater oil and gas fields in the region planned for development. Unocal is planning to follow West Seno with a development plan for the deepwater Merah Besar Field located on the company's East Kalimantan and Makassar Strait PSC areas. Merah Besar is expected to be developed as a satellite to West Seno with production to commencing in 2001.

Additional success was also recently encountered on West Seno with the latest delineation well, West Seno 4. The well encountered 319 ft of oil and gas pay thus far. Another well south of the Seno structure on the Janaka prospect within the Makassar Strait PSC, also encountered hydrocarbons. Janaka struck 39 ft of oil and gas pay and 54 ft of probable pay. If deemed commercial, Janaka would be added to the near-future development plans.

Unocal has also announced an aggressive 1999 drilling program in the Kutei Basin. A total of 20-25 deepwater exploration and delineation wells are planned in the area including five prospects on the Rapak PSC and Makassar Strait PSC estimated to hold about 725 million boe. The prospects are located within nine miles of the Seno area.

Unocal is the operator of the Makassar Strait PSC with a 50% interest with Mobil also holding 50%. Unocal also holds 100% interest in the East Kalimantan PSC, and 70% interest in the Rapak PSC with Mobil holding the remaining 30%.

Unocal and Mobil's West Seno deepwater development off East Kalimantan.

Philippines hoping for second gas find

The Philippine Department of Energy is hoping Shell can significantly reduce the country's dependence on imported oil with the promise of the second major gas find in the country's waters. Shell Philippines Exploration has begun drilling Destacado-2 well on the Nido prospect off northwest Palawan. The well is located 10 km south of the country's biggest confirmed gas find, Shell's Camago-Malampaya, which is estimated to hold recoverable reserves of 2.4-4.0 Tcf of gas. Destacado-2 is located in 1,624 ft of water and may contain around 2 Tcf of gas. If a discovery of this size is made, the country would boast reserves around 6 Tcf of gas and thereby greatly reduce its need for imports.

Shell also plans to drill two well in the San Martin prospect and Princesa Basin situated around Camago-Malampaya. San Martin is located in the north Camago-Malampaya area and Princesa lies in the southern portion. A pipeline from Camago-Malampaya is also currently under construction to transport the field's gas to the main island of Luzon.

Shell's Destacado 2 off Palawan (10 km south of Camago-Malampaya) has the potential to be the region's second major gas find.

Malaysia's first

deepwater attempt Malaysia's first deepwater well was a disappointment. The well, Kamunsu East-1, drilled by operator Shell was plugged and abandoned. The well reached its target depth of 8,680 ft using the Atwood Falcon semi and encountered some hydrocarbons, but not commercial quantities.

Shell, however, remains optimistic and is planning to continue exploration efforts in the Malaysian deepwater. While it did not discover the amount of hydrocarbons for development, it did provide the company with useful information on the region's geology. A Shell representative said that the well supported the original prognosis of the region and that the well confirmed Kamunsu East as the third field in the Kebabangan area. However, additional work will be required to confirm the volumes of hydrocarbons.

Chevron acquires Thailand interests

Chevron's recent acquisition of Rutherford Moran Oil has given the company a major foothold in Thailand's offshore market. With the acquisition, Chevron took over Rutherford's 46.34% interest in Block B8/32 in the Gulf of Thailand. The block is home of the gigantic Tantawan gas field which is already in production. The block has proven gas reserves of 153 million boe, two new fields currently being delineated, and the potential for additional exploration. B8/32 also neighbors blocks 7, 8, and 9 in which Chevron holds interests.

Australia putting pressure on LNG projects

The Australian government is increasing the pressure on LNG projects in order to comply with the 1997 Kyoto Protocol to reduce greenhouse gas emissions. Under the protocol, Australia agreed by the year 2012 to limit the increase in its greenhouse emissions to 8% above the level set in 1990. Now, in order to stay within the limit, the government is calling for a cut-back on emissions from Woodside's North West Shelf joint venture LNG Project. The cutback will reportedly cost the joint venture at least A$50 million and further delay the start up of the project. The project has already been delayed by several months due to weak demand for gas caused by an oversupplied Asian market. The project will now have to make process plant improvement in order to curb emissions. The project is operated by Woodside with partners BHP, BP, Chevron, Japan Australia LNG, Shell, and a Japanese joint venture between Mitsubishi and Mitsui.