Chairman of upstream oil and gas authority SKK Migas Dwi Soetjipto expected Spanish energy firm Repsol SA, operator of the Sakakemang block in South Sumatra Province, to be able to submit the block’s plan of development (POD) this year to help accelerate production, Bisnis Indonesia reported on Tuesday.
The paper quoted Dwi as saying that SKK Migas is focused in accelerating production from the recent giant discovery at the Sakakemang block to help increase the country’s oil and gas production.
Dwi said that Repsol can submit the Sakakemang POD this year to Ministry of Energy and Mineral Resources for approval once the Lemigas (Oil and Gas Institute) certifies the recent discovery. As such, Repsol doesn’t need to carry out another drilling to confirm the discovery, which may take about one year to complete.
Repsol announced in February of this year new gas discovery of about 2 tcf at the Sakakemang block, which was dubbed by SKK Migas as giant discovery. The company, however, said that it needs to implement another drilling to confirm the discovery.
Deputy Minister of Energy and Mineral Resources Arcandra Tahar said last month that if Repsol is already convinced with the economics of the Sakakemang block project, it is allowed to quickly submit the POD.
Arcandra said that the government will support Repsol’s plan to accelerate the production process of the Sakakemang block to within three years after gas was discovered by way of utilizing the existing production facilities at nearby Corridor Block.
"Our strategy is how to ensure that Sakakemang will start production no later than three years after gas discovery. The strategy is sharing facility with the existing facility of the Corridor block," he said on July 22.
Traditionally, similar project would require between 10-15 years for first gas production since discovery.
The Sakakemang block is operated by Repsol, which holds a 45 percent interest, while Malaysia’s Petronas holds another 45 percent interest, and Mitsui Oil Exploration Co. Ltd holds the remaining 10 percent interest. The Sakakemang Block was previously operated by Talisman Sakakemang B.V. Repsol acquired the block from Talisman in 2015. (*)
