Unocal Indonesia hits record oil find
Unocal Indonesia hits record oil find
SINGAPORE (Dow Jones): Unocal Indonesia Co, a unit of Unocal Corp, has made its largest deep-water oil and gas discovery yet with a recent exploration well off the coast of East Kalimantan, a Unocal official said yesterday.
Results from the West Seno #2 well, announced Monday, indicate greater oil and gas resources in the Seno field than the Merah Besar field drilled by Unocal earlier this year, the official said.
By the end of 1998, Unocal plans to drill at least five of the 50-60 deep-water prospects it has identified off East Kalimantan. The company has released estimates of oil and gas resource potential for three of the prospects: Seno at 210 million-720 million barrels of oil equivalent (boe), Merah Besar at 100 million-250 million boe and Janaka at 35 million-120 million boe.
The Unocal official said more wells will have to be drilled before specific reserve estimates can be made. "We're going to be drilling constantly - either delineation or exploration wells - for the rest of the year," the official said.
The Seno and Merah Besar fields are located in the Kutei basin, in deep waters of the Makassar Strait. Seno is located on the Makassar Strait PSC, operated and 50 percent owned by Unocal, with Mobil Corp (MOB) unit Mobil Makassar Inc holding the remainder.
Merah Besar is partly on the Makassar Strait PSC and partly the East Kalimantan PSC for which Unocal is operator and sole owner.
Unocal and Mobil are planning to submit a development plan for Merah Besar to the Indonesian government in the fourth quarter of 1998, with production targeted to begin in early 2001.
The Unocal official said delineation work on Seno may lead to the development plan for both fields being submitted at the same time.
The West Seno #2 well, drilled at a water depth of 2,800 feet and a total depth of 8,770 feet, tested 2,900 barrels a day of 37-degree API gravity crude and 3.1 million cubic feet a day of natural gas.
A second well test on the field is taking place this week, after which the West Seno #1 sidetrack well will be drilled.
In total, Unocal expects to drill 38 exploration wells on deep-water prospects offshore East Kalimantan during 1998. It's planning for rapid development using a tension-leg platform, which is common in deep-water developments in the Gulf of Mexico. The company has estimated the development cost for Merah Besar alone at $300 million.
The oil and gas development would be Indonesia's first in what the industry terms deep waters. Indonesia is trying to replace depleting reserves from its mostly mature oil fields.
Oil and condensate production, currently at about 1.5 million barrels a day, is a major source of hard currency for the government.