INPEX discovers major gas in Timor Sea Block

INPEX discovers major gas in Timor Sea Block

Dow Jones, Tokyo

Japan's INPEX Corp. said Friday it has confirmed a large natural gas accumulation in an offshore block in the Timor Sea, Indonesia.

The block, Masela PSC, is located about 800 kilometers east of the city of Kupang, Indonesia, and 400 kilometers north of Darwin, Australia.

INPEX's two appraisal wells, Abadi-2 and Abadi-3, tested a total 32.4 million cubic feet a day of natural gas - or equivalent to 5,600 barrels a day of crude oil.

The major Japanese oil and gas producer acquired 100 percent of the development rights on the Masela block in 1998 from Indonesia's state-owned Pertamina under a production sharing contract. INPEX's unit, INPEX Masela Ltd. is the block operator.

INPEX drilled the two appraisal wells from March-October this year, after the first well Abadi-1 made the first natural gas discovery in the Indonesian side of the Timor Sea in late 2000.

The successful results at the three wells suggest that the Abadi structure in the Masela block covers an area as large as 700 square kilometers, INPEX said.

"We can now go on to the next stage" of gas development, said an INPEX official. The size of the Abadi structure can warrant various commercial development options such as a liquefied natural gas project, a gas-to-liquids project and gas sales via pipelines to Australia, he said.

INPEX will conduct further study to determine the recoverable gas reserves in the area and research potential gas markets.

INPEX, which is owned 50 percent by state-run Japan National Oil Corp., has significant interests in Indonesia and Australia.