PT Pertamina Hulu Energy Nunukan Company (PHENC), a subsidiary of PT Pertamina Hulu Energy, an upstream subsidiary of state energy company Pertamina, on Tuesday (Dec. 12), commenced drilling of an offshore well within Nunukan Block, in North Kalimantan, near the Indonesian-Malaysian border.
PHENC began drilling Parang-1 Well, which is located near Bunyu Island, about 9 km from Bunyu coast. The company estimates the block to contain 50 million barrels of oil and gas 750 billion cubic feet (BCF).
Director for Exploration of PHE Rudy Ryacudu said the drilling of the well is a follow up of exploration drilling two years ago. The drilling is aimed to prove the earlier drilling activities.
The company sets target to drill with target depth of 10,400 feet for about 48 days, coupled with a plan to conduct formation test drilling (DST), which will require about 40-50 days.
The drilling uses Jackup Rig ‘Raniworo’ with capacity of 2000 HP, which is operated by PT Apexindo.
In early April this year, the Energy and Mineral Resources Ministry approved the plan of development (PoD) of Nunukan Block. Under the development scheme, the North Kalimantan provincial government will get 10 percent working interest.
Pertamina, through its subsidiary PHE Nunukan Company, currently holds 64.5 percent of working interest in the block, from 35 percent previously, after PT Medco Energi Internasional decided to offload its interest for economic reasons. The ownershiop of Videocon has also increased, from 12.5 percent to 23 percent. The remaining 12.5 percent stake is held by BPRL Ventures Ind BV.
Nunukan Block is located in the Tarakan Basin on the continental shelf of northeast Kalimantan, about 450 km north of the prolific oil and gas producing Kutei Basin. Both the basins have been filled with Miocene-Pleistocene fluvial and deltaic sediments in the onshore and shelf areas of the basin that grade into turbidite deposits on the slope and deep water portions of the basins.
Nunukan Block comprises of Badik and West Badik fields. Both fields are expected to produce 1,800 bopd and gas of 60 MMSCFD, Pertamina said earlier. The company earlier said it planned to drill 8 wells and set up an offshore oil and gas platform. From these fields, an underwater pipeline will be laid down from the fields to onshore processing facility in Bunyu Island.
PHE will make a decision will utilize the Bunyu Metanol Refinery on Bunyu Island, depending on the result of the final investment decision (FID) and front and engineering design (FEED). Should the FID is decided at end 2016, followed by engineering process in two years time, the fields would start production in 2019.