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PTT Exploration and Production Public Company (PTTEP) encountered 252 m of net gas pay while drilling the shallow-water Lang Lebah-1RDR2 exploration well on Block SK410B offshore Sarawak, Malaysia. The Thai operator drilled the well to a TD of 3,810 m primarily targeting the Middle Miocene cycle IV/V carbonate reservoir. The well was tested at a completion-constrained rate of 41.3 MMscf/D of gas and 246 B/D of condensate through a 40/64-in. Lang Lebah-1RDR2, the first exploration well in the 1,870-sq-km Sarawak SK410B project 90 km off Sarawak, is PTTEP's largest-ever discovery, the company said. Further drilling will confirm its potential.
Of the top 10 largest discoveries in 2013, half are natural-gas discoveries and all are in offshore environments, primarily in Africa (Mozambique, Angola, and Tanzania), Far East Asia (Malaysia), and transcontinental countries (Egypt), with estimated resources of more than 4,000 million BOE. The rest of the discoveries are mainly light oil, very likely containing associated gas. To bring gas from remote locations to the markets will remain an imposing task, with unavoidable challenges in terms of exploration, production, processing, and transportation, especially now when both oil and gas prices are low. The leading countries in natural-gas production in 2013, the same as in 2012, were the US (687.6 billion m3, 20.6% of total world gas production), the Russian Federation (604.8 billion m3, 17.9%), and Iran (166.6 billion m3, 4.9%). On the consumption side, the natural-gas consumption growth rate has been steady in the past decade (2003–13) with an average growth rate of 2.6%, while 2010 had a negative growth rate of -2.1%; 2011 had the highest rate at 7.6%; and, in 2013, the growth rate was 1.4%.
Exploration in the Far East Region has a very healthy glow at the moment. Significant petroleum related investments are being made in nearly part of the region. We are even seeing hitherto aloof Governments such as those of Burma, Bangladesh, North Korea, etc. investigate the benefits of foreign investment to spur development of energy resources.
Major investments are being made by Asean countries such as Japan in other Asean countries in order to spur more rapid development of resources and to, inturn, secure a supply of energy within the region.
Petroleum related investments are being channeled into two areas, Petroleum related investments are being channeled into two areas, exploration for new hydrocarbon reserves and development or enhancement of existing reserves. The latter emphasis is as relative new phenomenon which has taken the form of "assistance contracts" in Bangladesh, Burma, Indonesia and recently India. Apparently the price of oil is such that these projects are, in certain economic circumstances perferable to straight exploration projects.
As far as geologic trends throughout the region are concerned we are in the midst of an exploration boom in the better known, petroliferous basins. However more and more newcomers are arriving on the scene. These entities are pushing back the preconceived frontiers in their competition for exploration acreage. The trend is towards more diverse exploration in lesser known basins and areas. Certainly this also means probing of deeper, older parts of the section in many areas.
Subcontinents such as India with approximately 25 land rigs compared to nearly 4000 in the United States or China with only 300 give one a sense of "room to play". Many explorationist are looking in Southeast Asia with that view. Exploration in Southeast is on the upswing. Geologic and geophysical data is being acquired at an unprecedented rate. Al these data indicates strongly that the region is a viable area in which to invest in the search for hydrocarbons.
The title of this presentation is "Exploration Trends in Southeast Asia - an Overview". It is mainly for those people who are here at this Conference and possibly in Southeast Asia for the first time. I will try to give you some insight into where things seem to be headed in terms of exploration investment and in terms of the physical locations where exploration is taking place. physical locations where exploration is taking place. Historically three areas in Southeast Asia have been focal points for exploration and development investments over the years; these are Indonesia, East Malaysa (Sabah and Sarawak) and Brunei. This profile hasn't really changed, these areas are still the most important profile hasn't really changed, these areas are still the most important producing areas in the region and our crystal ball says that this producing areas in the region and our crystal ball says that this trend will continue through the 80's.
In addition to the three "old timers", which still contribute most of the export oil in the Far East, a new, very significant trend is emerging. There is a rising current of hydrocarbon related investments in the "have not" nations. Furthermore, these investments seem to be ever increasingly on a government to government basis (Fig. 1). We see exploration acreage being taken by Taiwan's Chinese Petroleum Company in the Philippines and Indonesia. Korean Development Co. in Indonesia, Deminex in Indonesia and Vietnam, etc. Of course there is the ever present Japex and its companion companies everywhere in the Far East Region.,
The spread of exploration and other hydrocarbon related investments throughout Southeast Asia by Japex et al is worth noting in more detail. This pattern may well illustrate the future trend exploration and development expenditures will take throughout the area.
Japanese government sponsored companies in addition to normal exploration projects have recently undertaken reclamation projects in Indonesia where Pertamina operates for them under a low interest, non-recourse loan arrangement. They are becoming involved in a similar way with gas development in Bangladesh and oil and gas development in Burma and China. In each case the impetus appears to be to secure a supply of oil close to home rather than make a profit. In conjunction with these deals there is the inevitable use of Japanese made goods which expands their export markets and partially compensates for lower rates of return on hydrocarbon projects. This type of "assistance" financing of exploration and development projects appears to be the trend of the future for Southeast Asia. The willingness of Japanese Government sponsored companies to invest everywhere in the Asean Region is a direct response to the growing awareness that there are significant untapped resource opportunities relatively close to home. It probably also reflects an awareness of relatively stable political conditions throughout the region compared to other parts political conditions throughout the region compared to other parts of the oil producing world.
As pointed out before, historically exploration activity and investment have been heavily concentrated in petroliferous areas identified in the early 1900's or before. Spasmodic efforts have been made in other areas but these were relatively limited. The trend now appears to be for renewed efforts in little known areas and a much broader exploration effort across all of Southeast Asia. This trend is greatly aided by a positive change in attitude of a number of Asian governments towards foreign exploration investments.
Countries in the region which had at least a partial change of heart within the last two to three years with respect to foreign contractor involvement are for example Burma, Bangladesh. Philippines, North Korea, Sri Lanka and Thailand (Fig. 2). Each of these areas promises significant exploration opportunities for foreign contractors in future years.
The paper discusses the exploration efforts and successes achieved in Malaysia under production-sharing contracts in the 5-year period from 1977-1981.
At the end of 1976, PETRONAS signed 5 production-sharing contracts with SHELL and ESSO for areas offshore Sabah, Sarawak and Peninsular Malaysia. In the 5-year period, over 52,900 line-km of seismic were acquired and 202 exploratory and appraisal wells drilled, resulting in 45 new hydrocarbons finds of significance.
Most of the oil and gas finds were made in the Tertiary sediments of the Malay Basin which had been relatively unexplored prior to 1977. Oil and gas finds were also made in the relatively more mature and geologically more complex exploration provinces of Sabah and Sarawak. The J4 discovery in Sarawak opened up a new precarbonate exploration play in the Central and SW Luconia and NW Balingian Provinces.
The high level of exploration activity has resulted in a substantial increase in Mabysia's remaining petroleum reserves. The 5-year period has also seen the emergence of the Malay Basin, offshore Trengganu as the most prolific hydrocarbon province in Malaysia to date. prolific hydrocarbon province in Malaysia to date. Introduction
Malaysia has had a long history of petroleum exploration which commenced at the turn of the century and resulted in an early success in 1910 with the discovery of the onshore Miri Field. After nearly half a century of further unsuccessful land exploration, the search for petroleum moved offshore, with the first offshore well being drilled in 1957.
Malaysia is blessed with a broad, shallow continental shelf (Fig. 1) which occupies a significant portion of the Sunda Shelf, one of the largest continuous shallow water areas in the world. With most of the Malaysian continental shelf being underlain by thick Tertiary sedimentary sequences, it was not surprising that oil companies rapidly began moving into the virgin Malaysian offshore areas with their modem floating rigs, with the first of these, the semi-sub 'Sedco Alpha' arriving in Sarawak waters in 1965. Large tracts of these offshore areas were leased out to seven companies and by early 70's, the existence of significant deposits of oil and gas had been established offshore Sabah, Sarawak and Trengganu, with offshore crude oil production commencing in Sarawak in 1968 and Sabah in 1974.
The Malaysian Government decided in 1974 to establish a national oil corporation, PETRONAS, with the major responsibility of looking after the nation's increasing petroleum resources. PETRONAS (acronym for Petroliam Nasional Berhad) was PETRONAS (acronym for Petroliam Nasional Berhad) was registered under the Companies Act on 17th August 1974 and on 1st October 1974, the Petroleum Development Act (PDA) was passed in Parliament, vesting ownership and control of the nation's passed in Parliament, vesting ownership and control of the nation's petroleum resources in PETRONAS. At this point, the seven petroleum resources in PETRONAS. At this point, the seven companies, namely Shell Esso, Conoco, Mobil, Aquitaine, Oceanic and Teiseki were operating in Malaysia under various exploration licences, which under the PDA ceased to have effect on 1st April 1975. After a period of long and difficult negotiations, PETRONAS at the end of 1976 signed 5 production-sharing PETRONAS at the end of 1976 signed 5 production-sharing contracts with Shell and Esso.
The Production-Sharing Contracts
On 30th November 1976, PETRONAS and Shell signed 2 production-sharing contracts. Sarawak Shell Berhad (SSB) was production-sharing contracts. Sarawak Shell Berhad (SSB) was granted a 44,550 sq. km contract area mainly offshore Sarawak while Sabah Shell Petroleum Co. (SSPC) and Pecten Malaysia Berhad (a 50:50 joint venture) signed for an area of ca. 14,350 sq. km located mainly western offshore Sabah with a 660 sq. km land block in the Dent Peninsula, eastern Sabah (Fig. 2).
On 8th December 1976, PETRONAS and Esso Production Malaysia Inc. (EPMI) signed 3 production-sharing contracts, one covering an area of ca. 38,000 sq. km off the east coast of Peninsular Malaysia and the other two covering areas of ca. 5300 sq. km and 5180 sq. km located western offshore western Sabah and the offshore Kudat/Labuk Bay area respectively (Fig. 2).
On 3rd May 1980, PETRONAS signed a production-sharing contract with Carigali Sdn. Bhd., BP Petroleum Development Ltd. and Oceanic Exploration and Development Corp. (equity split 50:42 1/2:7 1/2 respectively) for an area of ca. 3730 s, km located offshore NW Sabah.
The basic features of the contracts were a 70:30 production split in favour of PETRONAS, after allowing a maximum of 20% of gross production for cost recovery (25% for gas) and 10% of gross production for cost recovery (25% for gas) and 10% of gross production for royalties. Exploration was allowed for a period of 3 production for royalties. Exploration was allowed for a period of 3 years with a possible 2 year extension. The contract Areas are divided into 10-minute subblocks of ca. 347 sq. km each and when commercial oil discoveries are made, the subblock in which a field is located is converted into a Development Area with 2 years allowed for development of the field with a possible extension of 2 years. For gas, a holding period of five years is allowed after discovery. The production phase for both oil and gas lasts 15 years.
The signing of these contracts heralded a new era for the petroleum industry in Malaysia and most important of all, revitalized the search for new petroleum resources.
Abstract More than 70% of major gas discoveries in Malaysia are found within carbonate reservoirs of the Central Luconia Province, offshore Sarawak. The carbonates occur in the form of platforms and pinnacles of Middle to Late Miocene age encased in a coastal to shallow marine clastic succession. Despite the considerable historic success, current exploration activity in the region is relatively low and 3D seismic coverage is limited to the producing fields. During the 3rd Production Sharing Contract Round in 1995, less than 30% of the identified carbonate structures had been drilled and this situation has only slightly changed over subsequent years. Many of the remaining carbonate structures (mostly pinnacles and some platforms) were downgraded in the past due to perceived exploration risks such as:Many Pinnacles believed to be too small to contain significant reserves Structures believed to be severely overpressured, and therefore capable of holding only short gas columns Structures believed to contain high CO2 and H2S contamination Structures believed to have thief beds in the overburden rendering leakage very likely The dramatic upturn of interest in more gas in the region has provided incentives over the past years for some revival of exploration activity, also targeting smaller structures. Recent discoveries of several new gas fields have thrown a different light on some of the historically perceived exploration risks and have stimulated new exploration interest in the area (figure 1). The most significant of these discoveries is Petronas' PC4-1 which found a 640 metre gas column, at the time (2006) the longest penetrated in Malaysia, of normal (buoyancy) pressure and with minimal H2S and minor CO2 contamination (Figure 2).