State-owned PT Pertamina planned to conduct an evaluation of the East Natuna Block -- which holds Asia's largest gas reserves in the Riau Province, offshore Indonesia -- soon, according to the firm's senior executive, as reported Tuesday by local daily The Jakarta Post.
Pertamina is currently trying to conclude a memorandum of understanding with the National Iranian Oil Co. (NIOC) to acquire between two and four oil and gas blocks in Iran by mid-July before moving on with its plans for an evaluation of the East Natuna Block.
"After signing the MoU, we will carry out an in-depth due diligence report, including evaluation of our upstream blocks. This usually takes four months to complete,” Pertamina President Directo Dwi Soetjipto said Tuesday, as quoted by The Jakarta Post.
ExxonMobil signed the Production Sharing Contract (PSC) for the East Natuna block in 1980. Its affiliate Esso Natuna Ltd. joined a consortium comprising of Pertamina and Thailand's PTT Exploration and Production Public Co. Ltd. (PTTEP) in August 2012 in signing a restated principles of agreement (POA) with the Indonesian government for a new PSC to develop the block.
ExxonMobil indicated on its website that the Indonesian government agreed last December to extend the POA for 30 months due to the need to further assess and review technology and global market condition in order to commercialize the resources.
Gas resources in the East Natuna block, which contained an estimated 46 trillion cubic feet (Tcf) of gas, five times more gas than the Masela block in Maluku province operated by Japan's Inpex Corp., reportedly contained high carbon dioxide (CO2) level of 72 percent -- the highest CO2 level contained in any known oil and gas field the world. The removal of carbon dioxide in the East Natuna development of the block will require advanced technology and huge investment.
Indonesia's Ministry of Energy and Mineral Resources Director-General for Oil and Gas IGN Wiratmaja Puja said that the government would to hold a meeting to expedite East Natuna’s production.
“I cannot yet confirm (when operation will begin). We hope that it will start before 2030,” Wiratmaja said, as cited in The Jakarta Post.
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