The Special Task Force for Oil and Gas (SKK Migas) has announced that the Spanish oil and gas company, Repsol Andaman B.V., is withdrawing from the oil drilling project in the Andaman III Block located in the North Sea of Aceh.
This decision follows the negative results of the oil exploration activities in the Rencong-1X Well, which turned out to be dry, meaning no oil reserves were found.
Nanang Abdul Manaf, Deputy Head of SKK Migas, stated that Repsol has requested to terminate its contract for the management of the Andaman III Block since June.
Amir Faisal Jindan, Repsol Indonesia’s Stakeholders Relations Manager, stated that they, along with Petronas, have submitted the contract termination documents for the management of the Andaman III Block to the Aceh Oil and Gas Management Agency (BPMA). In the Andaman III Block, Repsol holds a 51% participating interest, while Petronas holds 49%, with a recoverable reserve of 1.89 million barrels of oil equivalent.
He mentioned that the drilling results of the Rencong-1X Well did not meet the expectations based on the 3D seismic data from the end of 2017. However, the drilling of the well, located in the North Sea of Aceh, the Malacca Strait, at a depth of 4,000 meters, resulted in a dry hole.
Diverting resources to Sakakemang
Amir explained that Repsol and Petronas are now shifting their focus to the development of the Sakakemang Block in South Sumatra. In Sakakemang, Petronas and Repsol each hold a 45% participating interest, while Mitsui Oil Exploration Co. Ltd (MOECO) holds 10%. “Hopefully, Sakakemang can begin production in early 2028,” said Amir.
Putting hope on Petronas
Following Repsol Andaman B.V.’s decision to return the entire management rights of the Andaman III Block to the government, Teuku Mohamad Faisal, Head of the Aceh Oil and Gas Management Agency (BPMA), hopes that Petronas Andaman B.V. would be interested in acquiring the majority stake in the Andaman III Block that was recently released by Repsol Andaman B.V.
“Since Petronas is an international company and is still holding a 49% share there, they might consider acquiring it, but it will require a process,” said Faisal to Bisnis on Monday (July 17, 2023).
Repsol, acting as the operator, holds the majority participating interest of 51%, while Petronas Andaman B.V. holds the remaining participating interest after the acquisition in 2019.
However, according to Faisal, Petronas has recently shown more interest in studying the South Andaman and Meuligoe fields rather than the Andaman III Block. He hopes that Petronas will consider exploring the potential of the Andaman III Block, which has relatively extensive fields.
