Tuesday, April 16, 2024

Pertamina Hulu Mahakam advances with US$ 300 million offshore field development

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Pertamina Hulu Mahakam (PHM) has secured the final investment decision (FID) approval to proceed with the implementation of the more than US$ 300 million Offshore Field Development Project (OPLL-3B) in the Mahakam Block.

Described as a significant milestone, the project aims to optimize the development of offshore fields in the Mahakam Block, a backbone of Indonesia’s oil and gas production.

The gas produced in this block plays a crucial role in meeting the demands of various industries, including fertilizer, petrochemicals, power generation, and city gas in East Kalimantan.

John Anis, CEO of Pertamina Hulu Indonesia (PHI), emphasized the importance of the Mahakam Block in Indonesia’s gas production landscape, underscoring its utilization for both domestic contracts and potential exports, in accordance with the allocations set by the Indonesian government through the Ministry of Energy and Mineral Resources.

The OPLL-3B Offshore project involves drilling and connecting 32 infill wells, perforation activities, and workovers at wells in the Peciko, South Mahakam, and Sisi Nubi offshore fields in the Mahakam Block.

The proposed wells, including new and sidetrack wells, will be strategically distributed across the three fields, with drilling activities scheduled to commence gradually from 2024.

The project, approved by SKK Migas, is expected to contribute to the sustainability of Mahakam Block’s production, enhance gas reserves, create value for the company, and have a multiplier effect on the regional economy.

CEO John Anis highlighted that the project aligns with PHM’s commitment to continuous gas well development, offering significant value to all stakeholders.

“Therefore, the drilling activities for the OPLL-3B Offshore project will utilize existing platforms to optimize functioning production facilities,” he said on Thursday, February 22, 2024.

John Anis explained that the new production wells are anticipated to increase Mahakam Block’s gas reserves by approximately 75 Bcf of gas and 1 MMbbl of condensate.

The peak production from the project is predicted to be achieved in 2026, reaching around 70 Million standard cubic feet per day (MMscfd) for gas and 1,200 barrels/day for condensate.

The decision to move forward with the OPLL-3B Offshore project was underpinned by the government’s oil and gas incentives provided to PHM in 2021.

These incentives, including improved fiscal terms for the Mahakam Block, enabled PHM to pursue breakthroughs by applying innovation and technological solutions to extract marginal resources.

John Anis acknowledged that the fiscal incentives played a pivotal role in supporting PHM’s ongoing development efforts and unlocking new opportunities for field development projects like OPLL-3B Offshore.

The exploration endeavors by PHM, coupled with ongoing studies and preparations for future development plans, reflect the company’s commitment to sustaining gas production from the Mahakam Block.

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