PTTEP to join ExxonMobil, Total and Pertamina
On October 20th, 2012, the Director of the Oil and Gas at the Indonesian Ministry of Energy and Mineral resources confirmed that the Thai national oil company, PTTEP, has been selected to replace the leaving Malaysian Petronas from the partnership.
In the competition, to take the seat left by Petronas, PTTEP passed the Kuwait Foreign Petroleum Exploration Company (KUFPEC) which had shown interest for this opportunity.
Anyway, Pertamina may also accept to reduce its own shares to leave a stake of East Natuna to KUFPEC since both companies have signed in May 2012 a memorandum of understanding (MOU) to preprare ground for future joint venture.
In 2010, Petronas from Malaysia had signed Heads of Agreement with ExxonMobil, Total and Pertamina, but on beginning 2012, the discussions were stopped before converting the Heads of Agreement into formal contract.
The Indonesia East Natuna block oil and gas field was previously called Natuna-D Alfa and is located in the Riau Islands.
The East Natuna field would hold 500 million barrels of crude oil.
Despite its size this East Natuna gas field present two challenges:
– 71% of carbon dioxide
– Remote location in regards of the nearest infrastructures to export the natural gas
In the newly formed joint venture, Pertamina and its partners share the working interests as following:
– Pertamina 35%
– ExxonMobil 35%
– Total 15%
– PTTEP 15%
Pertamina, ExxonMobil, Total and PTTEP to complete East Natuna project conceptual study
Given the size of the field and these challenges to overcome, ExxonMobil, Total, Pertamina and the new partner PTTEP have estimated the development costs in the magnitude of $20 to $40 billion capital expenditure.
The actual uncertainty on the costs is related to the large spectrum of solutions investigated for the development of East Natuna field.
Conventional scenario is to use a set of platforms to extract the oil and gas combined with:
– A network of export gas pipelines to supply onshore LNG plants.The countries neighboring East Natuna gas field are members of the Association of South East Asian Nations (ASEAN) and through this association they work on the Trans-Asean Gas Pipeline (TAGP) project.
The Trans-Asean Gas Pipeline project would link bout 2,300 kilometers of existing pipelines together and would add 4,500 kilometers to complete the grid for about $7 billion capital expenditure.
The capacities of floating LNG vessels is still limited, actually 3.5 million t/y and projects are to come with 6 million t/y, but would give more flexibility to the development of the project.
The revised amount of recoverable reserves and the conclusions of the conceptual study should be available in the same time in 2013 to Pertamina and its partners, ExxonMobil, Total and PTTEP to adjust the capital expenditure and launch the pre-front end engineering and detail (pre-FEED) work.