Indonesian green light for KrisEnergy

Indonesian authorities have approved a plan of development (POD) for the Lengo gas field in the Bulu production sharing contract (PSC) offshore East Java.

Approval of the POD paves the way for the operator, KrisEnergy, to pursue formal negotiations for gas sales agreements with potential offtakers.

The Bulu PSC covers 697sq km in three separate areas – Bulu A, Bulu B and Bulu C – over the East Java Basin in 50-60m water depth.

The Lengo gas discovery is in the Bulu A area and will be developed via four development wells and an unmanned wellhead platform. A 20in., 65km-long export pipeline will transport the gas directly to shore. Production is expected to start about 24 months after the joint-venture partners declare final investment decision and is expected to plateau at 70 MMcf/d.

The Bulu PSC is adjacent to KrisEnergy's East Muriah PSC, containing the East Lengo gas discovery. KrisEnergy plans to drill an appraisal well in the East Muriah PSC and, if successful, to develop East Lengo gas via a single well tied back to the Lengo facilities. KrisEnergy also operates the Sakti PSC, an exploration block adjacent to the Bulu A area, where the company completed 1202km 2D and 401sq km 3D seismic acquisition programs earlier in 2014.

Chris Gibson-Robinson, Director Exploration & Production says: “This is our first development as the operator in Indonesia and we have been building up our technical and project management competencies in Jakarta to be ready for this moment. When on stream, the Lengo field will bring the group’s production mix to approximately 52% gas versus 48% oil. Demand for gas continues to grow strongly across Indonesia and long-term pipeline prices are holding firm despite volatility in the international oil markets. Bulu is the potential aggregation hub for gas into East Java if we are successful in the appraisal of East Lengo and exploration in Sakti.”

KrisEnergy holds a 42.5% operated working interest in the Bulu PSC and is partnered by AWE Limited with 42.5%, PT Satria Energindo with 10% and PT Satria Wijayakusuma with 5%.

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