INDONESIA - Natuna.

There are several offshore oil and gas fields in Natuna, an archipelago in the South China Sea rich in hydrocarbons. The oilfields in West Natuna have a total capacity of about 215,000 b/d, making the area the fourth biggest oil producer next to CPI's system in Central Sumatra, Total/Inpex's East Kalimantan fields and the Java Sea.

The main operator in West Natuna is Conoco, which can produce more than 110,000 b/d from Belida field and nearby structures in Block B, and holds 40% in a partnership with Inpex (35%) and ChevronTexaco (25%). Block B's liquid reserves to be recovered amount to about 280m barrels of oil, condensate and LPG. The second is Gulf Resources, which operates the Kakap Block and has the 70,000 b/d KG and KRA fields, in partnership with Pertamina and other firms. Premier Oil, which in Sept 1996 bought Chevron's 67% stake in Block A, has the 15,000 b/d Anoa field and a major gas field. Its 25% partner is Petronas of Malaysia.

These three blocks contain about 4 TCF of recoverable gas. They began exporting gas to Singapore on Jan. 3, 2001, six months ahead of schedule, through a 650 km marine pipeline from the fields to Singapore's Jurong island (site of a huge petrochemical complex and power plants). The pipeline was officially inaugurated on Jan. 15 by Indonesian President Abdurrahman Wahid and Singapore's Premier Goh Chok Tong, with deliveries in 2001 to average 150 MCF/d and to rise to 325 MCF/d by 2003. Under agreements worth $9.4 bn signed on Jan. 15, 1999, by Pertamina and the Singapore utility SembCorp (part of Sembawang group), the three West Natuna operators are to supply a total of 2.5 TCF for 22 years starting from 2001. Conoco has managed construction of the pipeline and is operating the system.

Conoco is negotiating with Petronas for the supply of 1.5 TCF to Malaysia for 20 years through a second marine pipeline. The talks, supposed to be finalised before end-March 2001, are now concentrating on the price. Petronas wants a lower price than the one being paid by SembCorp (see Gas Market Trends of next week).