INDONESIA - South Sumatra.

Several companies operate in South Sumatra, mainly an oil province, including Stanvac, Pan Pacific's Enim Oil, Husky Oil of Canada, and Golden Spike of Bermuda. Their fields are small. Stanvac has several fields found since the early 1970s, with hydrocarbons reservoired in clastic and carbonate rocks. Stanvac has oilfields in Central Sumatra, which are small as well.

Asamera Oil Indonesia (AOI), a unit of Gulf Canada Resources, has oil and gas fields in Asamera region in South Sumatra. Some of these fields are old (like Kluang, found in 1913). In early 1991 it made a significant gas discovery at the Gelam-1 well, in its Corridor PSC Block which was extended for 20 years in 1989. Gelam-1, 35 km north of AOI's Bentayan oilfield, tested 24.8 MCF/d of gas and some condensates. In discoveries made subsequently, AOI found that Gelam was a large field extending north to another block held by Saga Petroleum of Norway (50%) and Pertamina (50%). A plan to develop the whole field jointly with AOI was approved in November 1994. This and other Corridor fields, including the Dayung giant, Suban and the 34% CO2-Sumpal field, went on stream in late 1997, and full production began in late 1998. With a 540 km Corridor Gas Pipeline from Grissik to the north completed in late 1998, the fields supply 300 MCF/d to CPI's EOR system at Duri, and 40 MCF/d to other users in North Sumatra.

In the Corridor PSC, AOI holds 54% and is the operator, with a unit of Talisman Energy of Canada holding 36% and Pertamina 10%. A revised 20-year PSA for Corridor was signed with Pertamina in 1996. AOI pledged to invest $65m over nine years on another phase of exploration and booked 670 BCF of net gas, after deducting its CO2 content which will be stripped away on extraction, and 3.6m barrels of net liquids in reserves. Future gas developments was to carry a revised 65/35 production split in favour of Jakarta, instead of the standard 70/30 split. To cover part of the $650m cost of developing its share of the field and the other Corridor fields, the AOI-led group in Feb. 1997 signed an agreement with a consortium of 19 lenders for credits of up to $450m, arranged by Itochu Corp and Sumitomo Bank of Japan, Chase Manhattan of the US and DKB Merchant Bank of Singapore. Development included the drilling of 40 wells in 1997.

Another Gulf Canada unit, Asamera South Jambi (ASJ), operates the nearby South Jambi B PSA block. There it found in late Feb. 1996 an important gas field at Bungkal, 13 km north-west of Dayung and near the gas pipeline to North Sumatra. The dry gas has 60% CO2 content. Production of net gas began in early 1998 and now is supplied to the gas pipeline to North Sumatra which passes through Jambi province. In this block, Asamera holds 45%, with 30% held by TotalFinaElf and 25% by Pertamina. ASJ has made several gas discoveries on the block since then.

Gas volumes from the Corridor and South Jambi B blocks, together with gas produced from the Jabung block by Santa Fe (see below), are supplied to the Duri field. These supplies to Duri will rise to 390 MCF/d in late 2002 and 480 MCF/d from mid-2003 under a 20-year deal for a total of 1.1 TCF signed in 2000. Total sales within Sumatra will reach about 530-550 MCF/d by mid-2003 from the three blocks. Sales to CPI will fall a few years later as some fields will decline. The pipeline is owned by the state's PGN. The same three blocks will also export gas to Singapore (see below).

The local Gulf Canada units have found more than 4 TCF of gas in Indonesia and they continue to make discoveries. In November 2000 AOI said test results in appraisal Suban-4 confirmed major gas deposits in a Suban-Durian Mabok field at a depth of 2,931 metres in the Corridor block. Drillstem test-1 yielded 24 MCF/d of gas and 156 b/d of condensate through a 5/8-inch choke from a 2,715-3,200 metre interval in fractured Pre-Tertiary granites. Wellhead pressure was 3,000 psi. In March 1999 delineation Suban-3 tested 27 MCF/d of gas and 200 b/d of condensate through a one-inch choke. The well was tested over a 570-metre, open-hole interval about 2,540 metres, of which the upper 225 metres appeared to be productive. Suban-3 is 2.2 km from the Suban-2 exploration find made in Jan. 1999 which tested 43 MCF/d of gas and 365 b/d of condensate from two gas-bearing zones, with a gas column of over 285 metres. In the South Jambi B block, ASJ said in March 1999 delineation Teluk Rendah-2 tested 14.1 MCF/d of gas and 292 b/d of condensate on a 1/2-inch choke from two zones. The gas had a very low CO2 content of 3% This is near the low-CO2 discoveries at Hari and Geger in the same block. The gas from these fields together with reserves in the southern part of the South Jambi B block will be exported to Singapore.

A 283km extension of the Corridor pipeline is to supply a power plant on Batam Island near Singapore. This is part of Pertamina's programme for a more efficient exploitation of several small gas fields in Sumatra. Pertamina operates a gas field in a nearby block, Jambi Merang, where reserves are estimated at more than 350 BCF. The gas is being supplied to North Sumatra by the 540 km Corridor Gas Pipeline.

In North Sumatra, Asamera has Block A which it operates with a 50% interest in partnership with Aceh Gas & Oil Co. of Japan (50%). There, it has discovered a major CO2/gas field similar to that of Natuna. Its first well, Langsa-1, in 1992 tested 36 MCF/d consisting of 81% CO2 and only 19% hydrocarbons. In the subsequent years, it found three fields, Alur Siwah, Alur Rambong and Julu Rayeu, with a total of 585 BCF of net gas reserves. On stream in 1999, these are producing about 200 MCF/d of raw gas and supply 120 MCF/d of processed gas to ExxonMobil's Arun field, 45 km away. From there the gas is pumped through ExxonMobil's existing system to reach the Arun LNG complex, 80 km north-west of Block A. Pertamina executives have said that, after ExxonMobil's expected success in separating gas from CO2 commercially at Natuna, several fields of this category, including Asamera's, would be developed.

Santa Fe Energy Resources (of Santa Fe Snyder, a unit of Devon Energy of the US), operates different blocks in Indonesia and produces 22,000 b/d of 37[degree sign] API, 0.4% sulphur oil from its Mudi field and nearby structures in South Sumatra's Jabung block. The field went on stream in early 1998 with a reserve of 50m barrels. Some of the crude oil goes to a Pertamina refinery and the rest is exported to Singapore. Production capacity is to expanded to 41,100 b/d and 130 MCF/d of gas. Gas production capacity is to be raised further for supplies to Singapore (see below), with an NGL plant to be installed on the block. The Jabung block is held 30% by Santa Fe (the operator), 30% by Amerada Hess, 30% by Kerr-McGee and 10% by Pertamina.

In September 2000, Santa Fe made two gas/condensate discoveries, one on the Jabung block and another offshore on its Salawati Island PSC block off Irian Jaya (see below). The onshore North Gemah-1 well tested 29 MCF/d of gas and 1,000 b/d of condensates from selected zones at a depth of 2,073 m in a Talang Akar sandstone. The average CO2 content was 30% in a 213-metre gas column. This was the seventh consecutive exploration well on the Jabung PSC area to be completed as a producer. In late Jan. 1999, Gemah-3 was suspended at a depth of 2,544 m after testing 1,823 b/d of oil and 9.74 MCF/d of gas from three intervals in a Lower Talang Akar fm. Follow-up Gemah-4 was spudded on Jan. 30, 1999 and tested gas and condensate. In late 1998, Gemah-1, the 5th find, tested 21.92 MCF/d of gas and 1,436 b/d of condensate from a Talang Akar fm. In late 1995 Geragari Utara-1 tested 5,100 b/d of 50[degree sign] API oil, 30 MCF/d of gas and 350 b/d of condensate from various sand intervals in the Miocene Gumai fm. In late 1996 it made a bigger discovery 7 km south-south-east of that wildcat, through Makmur-1, which six intervals at a depth of 1,833 m. The first three zones tested 3,915 b/d of light oil and 6.8 MCF/d of gas. One of the 1,115-1,135 m intervals tested 2,915 b/d of 50[degree sign] API oil on a 48/64-inch choke with a flowing tubing pressure of 485 psi. In August 1995, its North-East Betara-1 wildcat tested three intervals totalling 84 net feet of pay and yielded 22 MCF/d of gas and 420 b/d of condensate. The gas' CO2 content was 55%.

A final 20-year contract to supply Singapore with 2.273 TCF of gas in total from the Corridor, Jabung and South Jambi B blocks was signed last month by Pertamina President/CEO Baihaki Hakim and Singapore Power (SP) Chairman Ng Kee Choe. The supplies will consist of 948 BCF from Corridor, 894 BCF from Jabung, and 431 BCF from South Jambi B. Deliveries will begin on July 12, 2003 at the rate of 150 MCF/d, rising gradually to an average of 350 MCF/d by 2009 (see exports in Gas Market Trends No. 11).

In 1991-95, Santa Fe drilled 16 wells and made six finds on its PSC blocks. These include one on Vogelkop peninsula in Irian Jaya, for which it got a 20-year contract extension from Pertamina in the autumn of 1996 and the company pledged to spend $10.2m on exploration over five years. In late 1996, the company got a PSC for the 8,595 sq km Pagatan Block in the Asem-Asem Basin off South-East Kalimantan. In Sept. 2000 Santa Fe reported an offshore discovery on the Salawati Island PSC block off Irian Jaya, where KO1-1 tested 2.5 MCF/d of gas and 900 b/d of oil from two intervals with the well drilled to a total depth of 1,381 m. The find, only 40 km from Santa Fe's Irian Jaya operating base, expanded the offshore potential in the area of the existing TBC and TBA discoveries. But Santa Fe, which has a 33.33% stake in the Salawati Island block, wants to sell its interests in both the Salawati Basin and Salawati Island tracts.

Kondur Petroleum and Bumi Resources, local firms, have the onshore Kondur PSA block in Central Sumatra where a field is producing 14,800 b/d of oil (down from 15,500 b/d in mid-2000). The field is in decline.

In mid-2000, Calgary-based independent Pertacal signed a memorandum of understanding with Bumi to acquire 49% of the latter's stake and invest in an EOR system for the field. But in early 2001 the Canadian firm decided against joining this venture. This block was originally held mainly by Lasmo, which in mid-1995 sold its interests. Kondur Petroleum is connected to the pro-Suharto Bakrie Brothers industrial and trading group.