Major Gas Reserve Found Off Kalimantan

Jakarta Globe, Ririn Radiawati Kusuma, February 13, 2012

Chevron Indonesia has discovered a pocket of natural gas off the eastern
coast of Kalimantan that could boost the country’s production by more than
10 percent. (AFP Photo)

               

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Chevron Indonesia, an Indonesian unit of US energy giant Chevron, has discovered a pocket of natural gas off the eastern coast of Kalimantan that could boost the country’s production by more than 10 percent.

The company located a gas reserve of 2.3 trillion cubic feet in the Makassar Strait, and total cost to develop the block is estimated at up to $7 billion, the nation’s upstream oil and gas regulator BPMigas said on Monday.

The company is expected to produce 1,000 million standard cubic feet per day (mmscfd) of gas from the block, BPMigas said. Output of 1,000 mmscfd of gas is equal to about 172,000 barrels of oil equivalent per day (boepd). Indonesia’s natural gas production last year was 1.5 million boepd, according to BPMigas.

“We have agreed on the plan of development on those blocks, so we already know the reserve for the first phase of the project,” Gde Pradnyana, a spokesman for BPMigas, said on Monday. The total cost to develop the project is estimated at $4 billion to $7 billion, BPMigas said.

Chevron owns four gas blocks in the Makassar Strait, located between Kalimantan and Sulawesi islands, and continues to explore within those blocks for more gas reserves. It began exploration activities on the blocks in 2008.

Of the four blocks, two of them — the Ganal and Rapak blocks — are jointly owned with ENI, an Italian oil and gas company, in which it owns a 20 percent stake.

Chevron is Indonesia’s largest oil producer, with total daily production averaging 477,000 barrels of liquids and total average daily production of natural gas at 611 mmscfd in 2010, according to the company’s Web site.

Chevron operates in partnership with Indonesia’s government under so-called production-sharing contracts.

Indonesia has been struggling to boost oil production after the country’s crude oil output fell below 1 million bpd in 2007.

Oil companies operating in Indonesia produced about 904,000 bpd last year.

“That’s why we want to change the paradigm from oil to gas,” Gde said.