Unocal strikes again in Indonesian deepwater

Unocal has added to its Indonesian stronghold with its first deepwater discovery on the Rapak PSC offshore East Kalimantan. The well, Janaka North #1, was drilled to a true vertical depth of 9,625 ft and penetrated a 50 ft high-quality reservoir with porosities greater than 35% and low water saturations, and 77 ft of associated thin-bedded reservoir between 7,797 ft and 8,600 ft. The well was drilled in 4,319 ft water depths, making it the deepest water depth well drilled to date off Indonesia.

Jul 1st, 1999
Th 0799osasia1

Unocal has added to its Indonesian stronghold with its first deepwater discovery on the Rapak PSC offshore East Kalimantan. The well, Janaka North #1, was drilled to a true vertical depth of 9,625 ft and penetrated a 50 ft high-quality reservoir with porosities greater than 35% and low water saturations, and 77 ft of associated thin-bedded reservoir between 7,797 ft and 8,600 ft. The well was drilled in 4,319 ft water depths, making it the deepest water depth well drilled to date off Indonesia.


Unocal's PSC's off Indonesia. The Rapak is home of the company's latest deepwater discovery.
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The Janaka discovery follows Unocal's two largest deepwater discoveries in the area: West Seno and Merah Besar. West Seno has since been delineated and is estimated to hold 210-320 million BOE and 150 million bbl of oil. The company plans to drill deeper targets within the Seno structure later this year.

The company plans to next drill three prospects on the Ganal PSC and will then return to Rapak to drill additional wells. Each well the company plans to drill will be in progressively deeper water as part of the company plan to be drilling in 6,000 ft of water by the end of this year. A company representative said the well would allow Unocal to test the highly prospective portion of the firm's Indonesia exploration portfolio that lies in deeper water.

Unocal also recently entered into an agreement to farm out portions of its acreage to Lasmo. Under the terms of the agreement, Lasmo would earn 20% interest in the Ganal and Sesulu production sharing contracts and a 10% interest in Rapak. Unocal is the operator of the East Kalimantan, Ganal, Sesulu, Rapak, and Makassar Strait PSCs.

Thailand planning for new pipeline

Following the flotation of yen-denominated bonds, the Petroleum Authority of Thailand, in accordance with support from the government of Japan, is planning to award the construction contract for a 150-km gas pipeline from a gas field offshore Myanmar to Thailand. While the award has not yet been granted and details are still fairly sketchy, the prospective winners of the award are expected to be Japan's Mitsui and Saipem of Italy. The contract is valued at 30 billion yen.

The proposed pipeline will connect to an existing pipeline constructed last year from the Yadana Field operated by Total to the town of Ratchburi. The new pipeline will then deliver the gas to a power generation plant north of Bangkok. The pipeline deal, when awarded, will be Thailand's first large contract for its energy infrastructure since the 1997 Asian crisis. The award is expected this month.

Producers compete for Kipper fields

A power struggle is underway in the offshore waters of Australia's Kipper Strait. Three companies are all vying for stakes in the area's Kipper gas field and the associated Basker-Manta-Gummy (B-M-G) fields put up for bid by Australian Worldwide Exploration. Woodside, Santos, and Shell have all made pre-emptive offers on the acreage.

Woodside had originally announced that it had agreed to pay A$18 million for a 10% interest in the Kipper Field and a 23.53% interest in the B-M-G fields. Santos then made an offer on the acreage and Shell followed suit. However, industry analysts predict that the Shell bid was made on behalf of Woodside as a counter to the Santos offer. Woodside and Shell entered into an alliance last year covering upstream exploration, production, and marketing. If either deal went through, Shell's stake in Kipper would rise to 27.3% and Santos would rise to 10.2%.

Analysts are also pondering the chances that Santos and Shell will also make an offer on an additional 10% in Kipper and 23.53% in B-M-G.

It was put up for sale by News Corp in April and Woodside agreed to buy. The Kipper Field has estimated reserves of 500 bcf and the other fields are estimated at 260 bcf. The fields have supplied almost all of the gas to Victoria until an explosion at Esso's Longford Plant forced a need for alternative supply. The Kipper Field is seen as a major source of that alternative supply.

McDermott wins West Natuna pipeline

The Conoco-led West Natuna Sea Operators group has awarded a contract to J. Ray McDermott for the construction of a subsea gas pipeline from the West Natuna gas fields offshore Indonesia to Singapore. The pipeline will be the largest natural gas pipeline delivery system in the Asia-Pacific region. The 28-in. pipeline will run 300 miles and deliver 325 MMcf/d of gas from the fields to Singapore, as part of an agreement between Indonesian state-owned Pertamina and Sembcorp Gas of Singapore.

McDermott will use the KP 1 and DB 26 to install the pipeline in up to 280 ft water depths. The construction contract for the pipeline is valued at $335 million and is expected to be completed by 2001. There was, however, some tension on the award of the deal. Indonesia's Minister of Mines and Energy Kuntoro Mangkusubruto had questioned several aspects of the deal, including whether the tender was carried out transparently, as well as influence from Mohamad Hasan, a cabinet member of the former Suharto government and an 18.46% stake-holder in McDermott Indonesia.

Pertamina has staunchly denied the accusations and has since sent a letter to the Minister vowing that the tender was handled transparently. As far as Hasan's interests, McDermott has stated that the former cabinet member's shares are under negotiation for sale.

Another complaint concerning the contract also was filed prior to the award by Hyundai Heavy Industries of South Korea. The company was excluded from the bidding process by Indonesia's Commission V which claimed that Hyundai did not have the technical expertise required for the project. The grievance caused some delay in the award process, but was repealed when Hyundai was granted the award for the construction and installation of gas production facilities for the Block B project. The West Natuna Sea Operators Group consist of Conoco, Premier Oil, and Gulf Resources.

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