INDONESIA - Sulawesi & Medco.

Exspan, a unit of the local private company MedcoEnergi, has developed the Tiaka oilfield on the Toili block off Central Sulawesi, which went on stream at the rate of 8,000 b/d in June 2003. This is a Medco-Pertamina JOB (see OMT). The field is producing from six multilateral wells. Tiaka is 17 km off Tolo Bay. Its development has required reclamation of a small island where Medco installed production facilities and infrastructure. Crude oil flows to an oil-gas-water separator before moving to a storage barge for offloading by tanker. Facilities include berths for the oil barges and tankers.

Medco in 2001 developed the ability to re-inject lean gas into its fields, which means the waste gas from the separator at Tiaka is not flared. Additional benefits include improved oil recovery, because the reservoirs are re-pressured and LPG gas can be produced. Tiaka's proven and probable reserves are 21.4m barrels.

Exspan in February 2003 found another field near Tiaka containing 20-30m barrels. The 475 sq km Sulawesi JOB is made up of two areas, Toili (offshore) and Senoro (onshore). Exspan in 2002 sank a second appraisal well, Senoro-3, on a gas field which it found in 1999. The first delineation well drilled in 2001 indicated that the onshore area of the JOB has potential reserves in excess of 7 TCF of gas for LNG exports. Medco's blocks in Indonesia include one off Papua. Pertamina and Medco are promoting an LNG export venture (see Gas Market Trends No. 12).

MedcoEnergi, listed on the Jakarta Stock Exchange since 1994, was reported on July 3, 2006, by Petroleum Argus to be producing 55,000 b/d of crude oil and 167 MCF/d of gas in Indonesia. Argus said its active drilling programme had boosted its proven oil reserves by nearly 40% in 2005 to 118m barrels as of January 2006, with its proven gas reserves having risen 28% to 305 BCF. Argus said the company had boosted its net profit in 2005 by nearly 13% to $620m, partly on higher oil prices.

Medco's assets are mostly in Indonesia. But the company has exploration interests in Libya, Oman and offshore Texas. In 2005, it had formed a JV with independent US oil and gas producer Anadarko. That was part of Anadarko's efforts to expand in Indonesia. Medco also teamed up with Premier Oil and Inpex of buy a stake in Aceh's gas-rich Block A.

Energi Mega Persada (EMP) is another private Indonesian company expanding rapidly in Indonesia. EMP and the local private mining company Bumi Resources in 2006 decided to merge as they were both part of the private Bakrie Group. This group is controlled by the Bakrie Brothers, a diversified conglomerate. One of the brothers is Co-ordinating Minister for People's Welfare Aburizal Bakrie, one of the three super-ministers in the current Indonesian government. The merger is making the company the largest private Indonesian player in the country's petroleum sector, which wants to invest in the downstream as well as the upstream parts of the industry.

EMP's blocks in Indonesia were in mid-2006 said to contain proven and probable reserves of 437m barrels of oil equivalent. It was said in 2006 that after the merger was completed the resultant company was to be the most cash-rich firm among the private Indonesian players in the country's petroleum business (see who's who in Review No. 13).

22 Oil Finds In 2006: The Jakarta government on Jan. 31, 2007, announced that in the course of 2006, 22 new oil wells had been discovered with the combined reserves of 1.2 bn barrels. It said that, by then, the country was producing 857,000 b/d from 1,046 different oil wells.

The government is hoping more oil and gas discoveries will be made from new blocks now being offered and the ones acquired in recent years. A total of 40 new blocks are to be offered this year (see omt10IndnsFieldsMar12-07).

The Abu Dhabi-owned Aabar Aabar Petroleum Investments Co. (Aabar) announced in January 2007 that its wholly owned subsidiary, Pearl Energy, has been awarded two oil PSCs in the Karana and Sibaru areas, offshore Indonesia, through Pearl's two subsidiary companies. Aabar is one of new Abu Dhabi petroleum/energy companies which investing in upstream and downstream ventures in various parts of the world. Jakarta is hoping that they will invest in such ventures in Indonesia.

Pearl's wholly owned subsidiary, Pearl Oil Ltd, holds a 100% interest and operates the Karana PSC, which covers an area of about 5,390 sq km. Karana is located offshore in the Makassar Straits between the main islands of Kalimantan and Sulawesi.

Pearl's COO Chris Gibson-Robinson was in January 2007 quoted as saying: "We are delighted to have the opportunity to operate Karana PSC, which lies to the north and east of Pearl's existing Sebuku block. This enhances Pearl's exploration position within the Makassar Straits".

In the Sibaru concession area, Pearl Oil (Sandstone) Ltd, a wholly owned Pearl unit, hold 40% and Mitra Energy, the operator, holds 60%. Sibaru is located in the offshore extension of the greater East Java Basin and covers an area of 3,999 sq km. Gibson-Robinson said: "We welcome the opportunity to work together with a new partner in Mitra and to continue to strengthen our exploration portfolio in Indonesia, where we already hold significant acreage". He pointed out that Indonesia was one of Pearl's core operational areas and said the award of these concessions strengthened Pearl's portfolio and exploration potential. He added: "Previous work in the Sibaru area has demonstrated the presence of hydrocarbons, and this block builds on our position offshore East Java in a region where demand for oil and gas continues to grow at a rapid pace".