CAPITAL: Jakarta

MONETARY UNIT: Rupiah

REFINING CAPACITY: 929,745 b/cd

OIL PRODUCTION: 1.38 million b/d

OIL RESERVES: 4.98 billion bbl

GAS RESERVES: 72.3 tcf

Indonesia yielded a world-class discovery of natural gas in 1997.

Atlantic Richfield Indonesia Inc. confirmed the strike off western Irian Jaya in wells known as Wiriagar and Vorwata. Indonesian President Suharto named the field Tangguh.

Degolyer & MacNaughton estimated proved and probable reserves at more than 13 tcf of gas, with 6.5 tcf more possible.

Most of the field lies offshore in water 225 ft deep on two blocks, Wiriagar and Berau. Wiriagar interests are ARCO 80% and KG Wiriagar Petroleum Ltd. 20%. Berau interests are ARCO 48%, Occidental Berau of Indonesia 22.856%, Nippon Oil Exploration (Berau) Ltd. 17.144%, and KG Berau Petroleum 12%.

The Berau Block discovery, Vorwata 1, flowed 30 MMcfd from Jurassic and Permian formations. The Vorwata-2 confirmation well, 11 miles from Vorwata 1, flowed 33 MMcfd limited by tubing from more than 400 ft of net pay in Jurassic sandstone. A third well flowed 29 MMcfd.

ARCO was to drill 11 appraisal wells and conduct further exploration in the area.

At yearend 1997 it reported a gas discovery in Ubadari 1 about 30 miles southwest of the earlier discoveries. The well, in 63 ft of water in Berau Bay, tested a combined 45 MMcfd on four drill stem tests from the same pay as at Tangguh.

ARCO and Pertamina, the state oil company, expected to complete a declaration of commerciality for Tangguh by mid-1998. The field was thought to be capable of supporting an LNG project that the companies planned for eastern Indonesia and hoped to begin building by 2000.

Tangguh field development was to coincide with construction of the multiple-train LNG complex.

ARCO and BG Exploration & Production signed an agreement to supply gas to the LNG project from their production sharing contracts in the area. As part of the agreement, ARCO became operator of the Muturi field development on a production sharing contract area held by BG. In late 1997 the companies reported another discovery, Vorwata 4, which tested 36 MMcfd of gas from Jurassic sandstone.

In other LNG activity, Pertamina commissioned a seventh train at the Bontang export plant, the world`s largest. The new 2.7 million metric ton/year unit brought total plant capacity to 18.4 million tons/year. Pertamina planned to start up an eighth train, adding 2.95 million tons/year to capacity, in December 1999.

Other upstream activity

Elsewhere, Gulf Canada Resources Ltd. reported a gas discovery 15 miles southeast of its 1996 Bungkap strike in southern East Kalimantan.

The newer well, near Gulf Canada`s Corridor gas development project, tested 23.4 MMcfd. The company planned a seismic program and two appraisal wells in 1998.

In the zone of cooperation that Indonesia shares with Australia in the Timor Sea, BHP Petroleum Pty. Ltd. received approval to develop Kakatua North oil field as a single-well subsea satellite of the company`s Elang/Kakatua development.

A floating production, storage, and offloading system was due on stream in mid-1998 for Elang/Kakatua. Flow from Kakatua North, 12 km from the FPSO site, was to begin 6 months later. It was expected to boost reserves for the complex to 29 million bbl from 17 million bbl.

The Timor Gap yielded more discoveries in 1997 (see Australia section).

In the Natuna Sea, Premier Oil plc disclosed a gas discovery in the Gajah Puteri 2 well, which tested a restricted 35 MMcfd of gas and 1,406 b/d of condensate from three pay zones. Premier planned to include the well in a proposal to sell gas from the western Natuna Sea to Singapore. It commissioned the drilling of four wells on the block, Natuna Sea Block A, in which it held a 66.67% interest.

Block A was being developed under a program led by Pertamina covering nearby Block B, operated by Conoco Indonesia Inc., and the Kakap Block. The project was to supply 325 MMcfd of gas by pipeline to Singapore in mid-2000.

On the Kakap Block, a discovery operated by Clyde Petroleum Indonesia Ltd., 1 Nelayan, cut eight oil-bearing sands over a net 230 ft section near the KG platform in Kakap field. It was expected to be developed as a satellite.

Exxon Corp. began studies of a project to supply gas from supergiant Natuna gas field to West Java. The project involved delivery of 960 MMcfd of gas to new and existing power plants and other customers.

Onshore, Caltex Pacific Indonesia received approval of a request for financial assistance for a steamflood in giant Minas oil field. The project was expected to add 300-400 million of light oil to ultimate recovery. Caltex said the project would require investment of $630 million.

In early 1997, Minas was producing about 225,000 b/d of oil.

Petrochemical action

A number of petrochemical plants were in various stages of proposal or planning in 1997.

Among them, PT Petro Indokimia Sentre, of the Salim Group, proposed a $1.56 billion basic olefins plant at an undisclosed site. The plant would produce 850,000 metric tons/year of ethylene, 425,000 tons/year of propylene, and other chemicals. Completion was scheduled in 2001.

Also Nissho Iwai Corp., P.T. Tirtamas Majutama, and Siam Cement Co. proposed to build a plant at Tuban on Java to produce a combined 3 million tons/year of ethylene and proplylene, and polymers.

PT PENI polyethylene joint venture, in which BP Chemicals Ltd. holds a 51% interest, planned to build a 900,000 ton/year ethylene plant at Bojonegara, West Java, to supply PT Peni`s nearby polyethylene plant.