The group led by Santos Ltd. of Adelaide has agreed to perform the work needed to extend by at least 2 years the production lives of Oyong and Wortel oil and natural gas fields in the Sampang production-sharing contract area offshore Indonesia.
The group will spend an undisclosed sum to end the current oil-production program and focus on gas production.
The group says that oil production was on the wane and has now been made uncommercial by falling global oil prices. The joint venture partners now believe there is more value in extracting the gas reserves.
Santos says the work should enable recovery of an additional 34% of gas in the reservoirs, a percentage that amounts to 17 bcf.
During the last quarter, oil production was running at just more than 900 b/d with gas production reaching 67 MMcfd. This flow rate was achieved following a 2015 workover at Oyong and a compressor upgrade at Wortel aimed at keeping gas production going beyond 2018.
The move to gas-only production is scheduled for September 2017. This will enable two floating production, storage, and offloading vessels, the Seagood and the Surya Putra Jaya, to be decommissioned during fourth-quarter 2017 so that production costs can be reduced to $22 million/year in 2018 from $50 million/year.
The new work is expected to extend the life of the two fields until at least 2020 with the possibility of further life extension through exploration work in the surrounding area. An exploration well is being considered for 2018, which may be in the nearby Paus prospect—within tie-back reach of Oyong’s facilities.
Oil production began at Oyong in 2007. Wortel, about 7 km away, came on stream in 2012.
Santos is operator of the fields with 45% interest. Singapore Petroleum Co. has 40% and Melbourne-based Cue Energy Resources Ltd. has 15%.