Balikpapan- PT Pertamina Hulu Mahakam (PHM), a subsidiary of PT Pertamina Hulu Indonesia (PHI), has received Final Investment Decision (FID) approval from PT Pertamina Hulu Energi (PHE), the Upstream Subholding of Pertamina, to continue implementing the Optimization of Field Development/OPLL-3B Offshore project valued at over USD 300 million in the Mahakam Working Area in East Kalimantan.

The scope of the OPLL-3B Offshore project involves drilling and connecting 32 infill wells, perforation activities, and controlling sand influx (workover) required for offshore wells in the Peciko, South Mahakam, and Sisi Nubi fields in Mahakam Working Area. The suggested 32 wells comprise a combination of newly drilled and sidetrack wells dispersed throughout these three fields. The drilling activities we have planned to be phased, commencing in 2024. The OPLL-3B Offshore Work Plan had previously received approval from SKKMIGAS.

John Anis, PHI's President Director, expressed the company's commitment to continually invest in drilling exploration and exploitation wells to support achieving national oil and gas production targets, energy transition policies, and PT Pertamina's net-zero emission targets.

" Mahakam Working Area served as one of the pillars of Indonesia's oil and gas production. Presently, gas production from Mahakam Working Area is commercialized to meet the needs of the fertilizer industry, petrochemicals, power plants, and city gas in East Kalimantan. 

"Additionally, some were used as liquefied natural gas (LNG) through PT. Badak NGL facilities, fulfilling domestic contracts and, if there is a surplus, allocated for exports according to the allocation set by the Indonesian government through the Ministry of Energy and Mineral Resources," said John Anis.

John explained that the OPLL-3B Offshore project used to increase gas reserves and contribute to the sustainability of Mahakam Working Area’s production, creating value for the company and providing a multiplier effect for the regional economy, such as meeting domestic gas needs, supporting the Pertamina RDMP refinery, empowering local contractors, and enhancing national capacity.

"We are continuously making strategic steps to develop oil well drilling to provide significant value to all stakeholders. Hence, the drilling of wells in the OPLL-3B Offshore project will utilize existing platforms to optimize well-functioning production facilities," clarified John.

He expects the production wells in this project to increase Mahakam Working Area’s reserves by approximately 75 Bcf of gas and 1 MMbbl of condensate. "The peak production from this project is projected to reach in 2026, estimated at around 70 MMscfd for gas and 1200 bbls/day for condensate," he added.

"PHI and all subsidiaries persistently innovate and develop technological applications for managing upstream oil and gas company operations. We understand the subsurface character of Mahakam Working Area, which has a high natural decline rate, necessitating numerous infill drillings. Therefore, in the OPLL-3B Offshore project, PHM is increasing the number of wells in existing fields and reducing the distance between wells to enhance drainage or the recovery factor," John elaborated.

Positive Impact of Oil and Gas Incentives

John Anis clarified that the significant potential of the OPLL-3B Offshore project recognized as a result of the Oil and Gas Incentives granted to PHM by the Indonesian Government in 2021.

According to him, these incentives positively impacted PHM's investment capacity in existing field development projects (exploitation) and seeking new oil and gas resources through exploration activities. "With incentives such as improved fiscal terms for Mahakam Working Area, PHM can continue to make breakthroughs by applying innovation and technological applications to obtain marginal resources," said John.

John highlighted that this incentive was instrumental in enabling PHM to advance field development by supporting the drilling of new wells. This initiative aimed to bolster the recovery factor, extend the lifespan of wells, and ensure the sustained production of Mahakam Working Area Mahakam for an extended duration.

"Post-incentives, the development of existing fields through drilling new wells has provided new subsurface data, opening opportunities for new development projects, both infill and step-out, as seen in the OPLL-3B Offshore project," added John. Meanwhile, the exploration efforts undertaken by PHM have yielded positive results, such as the discovery in Manpatu.

"We continue to study, prepare future development plans, and strive for technical innovations to ensure the sustainability of oil and gas production from Mahakam Working Area," he concluded.

PT Pertamina Hulu Mahakam (PHM) is a PHI subsidiary conducting upstream oil and gas operations based on Environment, Social, Governance (ESG) principles in the Mahakam Working Area in East Kalimantan. PHM, along with other PHI subsidiaries and affiliates, implements innovative Social and Environmental Responsibility programs in Economics, Education, Health, Environment, Infrastructure, and Disaster Response to support sustainable community empowerment and the achievement of Sustainable Development Goals (SDGs). PHI's headquarters is in Jakarta. Further information about PHI is available at https://phi.pertamina.com.