Indonesia Oil & Gas Fields - 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 in Central Sumatra, the Java Sea, and Total/Inpex's East Kalimantan fields. Oil operators in West Natuna include Conoco, which produces 110,000 b/d from the Belida field and nearby structures in Block B, and holds 40% in a partnership with Inpex (35%) and Texaco (25%); Gulf Resources which operates the Kakap Block and has the 70,000 b/d KG and KRA fields, in partnership with Clyde, Pertamina and other firms; and Premier Oil, which in September 1996 bought Chevron's 67% stake in Block A that include the 13,000 b/d Anoa oilfield and a gas field with 650 BCF of proven reserves and 1,500 BCF of possible reserves. These three blocks are rich in gas. On Jan. 15, 1999, Pertamina signed agreements with Singapore utility SembCorp (part of Sembawang group) to supply the latter with up to 325 MCF/day of West Natuna gas for 22 years starting from 2001. The gas is being developed by Conoco, Gulf Resources and Premier Oil. The three have total proven reserves of 2.5 TFC. They will supply the gas through Pertamina. Conoco will manage construction of a 650 km marine pipeline from the fields to Singapore's Jurong island (site of a huge petrochemical complex and power plants). Conoco will operate the system from 2001. The Exxon Natuna Operation: One of the fields in the East Natuna Sea, still disputed with Vietnam and China has hinted a claim over the archipelago, is called L in the D-Alpha Block. This is the one to be developed by Exxon's Esso Exploration and Production Natuna in a $42 bn project to produce in the next decade 15m t/y of LNG and gas to be supplied by marine pipeline to Thailand and other markets. The field has about 210-250 TCF of gas in place. But more than 70% is carbon dioxide, CO2. Only about 45 TCF of methane and other gases can be exploited. L field was discovered in 1973 by Agip, which held the D- Alpha Block in equal partnership with Tenneco and Phillips. The Italian company and its partners sold the block to Exxon in 1979. The discovery well is called AL-1X. Exxon and Pertamina first signed an outline PSC on this in 1980, with Pertamina holding 50% and Exxon's local unit the other 50%. However, the PSC details were not agreed upon and negotiations dragged on until November 1994. In the meantime, Jakarta set up high-powered committees, including six ministers, to move the project. The most important was the Natuna Project Execution Team, chaired by Jusuf Habibie, then the minister of research and technology, and its advisors included the then armed forces chief Gen. Faisal Tanjung. Natuna was of geo-strategic importance, with Indonesia intending to have a strong presence in the South China Sea, the scene of confrontations between China and ASEAN states In November 1994 a 50-50 deal was reached between Exxon and Pertamina, with leaders involved in the background including the president Suharto and several top ministers. The signing ceremony coincided with US President Clinton's visit to Jakarta. The final details were agreed on Jan. 9, 1995. In July 1996, Pertamina sold 26% of its stake to Mobil and later said part of its remaining 24% equity would be sold to Japanese companies able to secure LNG clients. If developed on the scale announced by Exxon, together with a huge LNG complex, this field could lengthen the life of Indonesia's LNG business for another 50 years.