PHM Obtains Final Invetment Decision Approval For The OPLL-3B Ofshore Project

Illustration of the refinery (doc. SKK Migas)

JAKARTA PT Pertamina Hulu Mahakam (PHM), a subsidiary of PT Pertamina Hulu Indonesia (PHI), has received approval from the Final Investment Decision (FID) from PT Pertamina Hulu Energi (PHE) as Pertamina Upstream Subholding to continue the implementation of the Optimization project for Field-Lapangan Development/OPLL-3B Offshore worth more than 300 million USD in the Mahakam Working Area (WK) in East Kalimantan.

The scope of the Offshore OPLL-3B project activities is in the form of drilling and connecting 32 infill wells as well as formulation and cost control activities that will be needed in wells in the offshore fields of Peciko, South Mahakam, and Sisi Nubi at Mahakam WK.

PHI President Director, John Anis, said the 32 proposed wells consisted of new wells and side track wells spread across all three fields. The drilling activity is planned in stages starting in 2024. The OPLL-3B Offshore Work Plan previously received SKK Migas approval.

"WK Mahakam is one of the backbones of Indonesian oil and gas production. Currently, the production of Mahakam's WK gas is commercialized to meet the needs of the fertilizer industry, petrochemicals, power plants, and city gas in the East Kalimantan region, while others are used as liquefied natural gas (LNG) through PT. Badak NGL facility, to fulfill domestic contracts and excesses if any is used for exports according to the allocation set by the Indonesian government through the Ministry of Energy and Mineral Resources," said John Anis in his statement to the media, Monday 18 December.

John explained that the Offshore OPLL-3B project is expected to increase oil and gas reserves and contribute to the sustainability of Mahakam's WK production, create value creation for companies, and provide multiplier effects for the regional economy, in the form of meeting domestic gas needs, Pertamina RDMP refineries, empowering local contractors, and increasing national capacity.

"We continue to take strategic steps to develop oil and gas wells in order to provide significant value for all stakeholders. Therefore, the construction of wells in the Offshore OPLL-3B project will also use existing platforms so that they can optimize production facilities that are still functioning properly," John explained.

According to him, the production wells in this project are expected to increase Mahakam WK reserves by around 75 Bcf gas and 1 MMbl condensate.

"The peak production of this project is predicted to be achieved in 2026, which is around 70 MMscfd for gas and 1200 bbls/day condensates," he added.

John added that his party understands the character of Mahakam's WK subsurface with a high natural decline rate, so it requires a lot of infill drilling.

"Therefore, in the OPLL-3B Offshore PHM project, increasing the number of wells in the existing field and reducing the distance between wells to increase the draining or recovery factor," said John. John Anis explained that the potential development underlying the OPLL-3B Offshore project was identified thanks to the Oil and Gas Incentives from the Indonesian Government which were given to PHM in 2021.

According to him, the incentives provided by the government have had a positive impact on increasing PHM's ability to invest, both in existing field development projects (exploitation) and in an effort to find new oil and gas resources through exploration activities. "With incentives in the form of improving the fiscal term for Mahakam WK, PHM can continue to make breakthroughs by implementing innovations and technological applications to obtain marginal resources," said John.

This incentive, according to John, has supported PHM to continue to develop the field by drilling new wells so that they can increase recovery factor and prolong the age of wells so that Mahakam WK production can be maintained for a longer time.

"The development of the existing field through drilling new wells after the incentives, according to John, has provided new subsurface data so that it opens up opportunities for the birth of new development projects, both infills and step-outs, such as the OPLL-3B Offshore project," added John.

Meanwhile, exploration efforts carried out by PHM have so far provided positive results, such as disclosure in Manpatu.

"We continue to study, prepare future development plans and seek engineering innovations in the context of the sustainability of oil and gas production from the Mahakam WK," he concluded.