Pertamina emerged as the winner of the bidding process for the management of the East Natuna Oil and Gas Working Area (WK) in the Riau Islands, with an investment of US$12.5 million.
The East Natuna WK, formerly known as the Arwana-Barakuda WK, was one of the three work areas within the East Natuna Block. The block was divided into three work areas: Arwana-Barakuda WK, Paus WK, and D-Alpha WK, with D-Alpha being the largest gas field.
Foreign interest in East Natuna Project
Several foreign companies expressed interest in participating in the management of the East Natuna project, including Russian oil company Zarubezhneft, which acquired a 50% participating interest (PI) through its subsidiary ZN Asia Ltd. Additionally, an oil company from Malaysia also showed interest.
Other companies includes, ExxonMobil and PTT Exploration and Production (PTT EP), previously part of the East Natuna consortium with Pertamina, decided to withdraw from the project, resulting in the cessation of gas extraction activities in the East Natuna Block.
Pertamina designated as operator
Despite the initial interest from foreign companies, Pertamina has been designated as the operator for the East Natuna Block due to the lack of confirmation from any other company.
As the operator of the East Natuna WK, Pertamina is committed to conducting geographical and geophysical studies, acquiring 430 square kilometers of 3D seismic data, and drilling one exploration well. The company will operate under a 30-year production sharing contract for the exploration WK.
All Cooperation Contracts Contractors (KKKS) have fulfilled their financial obligations, including signature bonus payments and implementation guarantees, before the signing of the cooperation contracts, according to Tutuka Ariadji, Director General of Oil and Gas at the Ministry of Energy and Mineral Resources.
Challenges of Managing East Natuna Block
The stagnation in the management of the gas field can be attributed to the high CO2 content in the block, which complicated the operations. Pertamina has retained a portion of the East Natuna WK in Riau, including a vast area with a significant gas reservoir.
The East Natuna Block has an estimated gas potential of up to 222 trillion cubic feet (TCF), with a high carbon dioxide (CO2) content of 71%. The high CO2 content presents challenges and increases the cost of managing the block compared to other oil blocks.
Pertamina aims to expedite the exploration of identified prospects within the East Natuna WK. Areas rich in CO2, including the AL structure, will be returned to the state as part of the company’s focus on further exploration and development.