Drilling campaign expanding off eastern Indonesia

The Energy Searcher drillship, selected by Canadian Petroleum for its upcoming program in Indonesian waters.

Frontier exploration is getting underway in moderate water depths offshore Seram Island in eastern Indonesia. Despite a solid production history onshore the island where the Santos-operated Bula oilfield is located, the adjoining offshore area has been largely ignored.

However, recent seismic mapping of these waters, allied to the prospectivity offshore Irian Jaya to the east, suggest the potential for something special. Possibly even super-giant fields, according to Rick Schmitt, Vice President, International Exploration & Production of the operator Canadian Petroleum.

The company is the international division of Calgary-based Canadian Occidental Petroleum (Canadian Oxy). Like other organizations in Calgary, it is aiming for rapid production growth through overseas operations. To date, the firm's main asset is Yemen's Masila Block where the company is that nation's largest oil operator, generating over 200,000 gross b/d.

In the Far East, Canadian Petroleum's previous ventures as an offshore operator were two short-lived production-sharing contracts in Vietnam's Nam Con Son Basin. These were relinquished and sold earlier this year, following disappointing drilling results.

However, Indonesia offers longer-term scope.

Over the past five years, CanPet has explored in several blocks both as operator and non-operator. It negotiated control of the offshore Seram block and the Manna block off/onshore south-west Sumatra in quick succession during 1996-97.

Both these blocks were assigned under Indonesia's more favorable frontier fiscal terms, which offer a 65/35 production-sharing ratio in Pertamina's favor, compared with an 85/15 for a standard Indonesian onshore production sharing contract (PSC). Canadian Petroleum holds a 100% working interest in both licences, but is looking for farm-in partners to share the costs of upcoming exploration drilling.

Deeper strata

Prior to Canadian Petroleum's arrival, extensive seismic had already been acquired on the 11,000 sq km Manna block. This data has subsequently been re-processed and the most promising targets identified are Miocene carbonates at water depths of 50-75 meters, approximately 25 km from the shore. There are good indications of a continuation of the known onshore oil play in that part of Sumatra, according to Schmitt.

Canadian Petroleum also completed two new 2-D seismic programs off Seram Island last year. The 15,000 sq km block is thought to be an extension of the proven onshore Seram fractured Mesozoic carbonate play, with numerous large structures identified in water depths of 350-400 meters. That is deep by Indonesian standards, and the first well will also constitute Canadian Petroleum's deepest as an offshore operator.

These targets are much deeper than those in the Manna acreage, with a total prognosed depth for the wells of 4,500 meters. The well design includes provision for high temperature/high pressure conditions. Jet Drilling was the successful contractor, and Canadian Petroleum expects to mobilize the drillship Energy Searcher first to Seram, with options to continue onwards to drill the Manna well.

Should oil be found immediately offshore Seram, Canadian Petroleum has the option to extend its PSC for a further period of exploration. The onshore discoveries in the deeper carbonates have tested fairly low API oil (20°). "But the play depth and maturity offshore suggests we may find better quality oil than that," says Ian Herring, Canadian Petroleum's Vice President, International Technical/Operational Services.

Although the geology is complex, any discoveries off Seram should be within Canadian Petroleum's development capability, given its exposure in Yemen to multilateral horizontal wells. Worldwide, the company has participated in over 800 horizontal wells with diverse heavy and conventional oil and gas objectives.

In anticipation of a major discovery, CanPet is already thinking in terms of a development scheme involving fixed platforms tied to an FSO. An FSO/FPSO cooperative agreement with SBM has been negotiated, which could be used to accelerate the field development.

In addition to in-house reservoir analysis, Canadian Petroleum can draw on experience gained as a member of Canada's Petroleum Recovery Institute with benefits such as magnetic resonance imaging core testing.

The company has also sponsored development work on downhole separation technology by Canada's Centre for Engineering Research, some of which may soon be applied in the Masila oilfields. This technology could be transferred to Seram or Manna if medium gravity crudes are discovered which require some form of artificial lift. Canadian Petroleum is also a practiced exponent of high capacity electrical submersible pump technology in Masila.

Bonaparte farm-in

Another of Canadian Petroleum's core overseas regions is Australia. Last December, it farmed into 50% of BHP's WA-260 P exploration permit in the Timor Sea's Bonaparte Basin. Here development has just been initiated of the 1995 Buffalo oil discovery, located 560 km northwest of Darwin. A steel five-slot, shallow water unmanned wellhead platform is being supplied by ASC Engineering of Adelaide with a leased Modec FPSO stationed 2 km away in deeper waters.

The FPSO, with 850,000 bbl storage capacity, will offload to shuttle tankers.

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