South East Asia (SEAR)
Director’s report on activities
KUFPEC’s SEAR continues to be a growth area for KUFPEC and during 2015 witnessed further increased activity with the drilling of 17 development wells and five Exploration wells. KUFPEC’s net share of production from the region during 2015 was 50,426 boepd.
The SEAR 2015 highlights included the drilling of the first commitment well in Jati EL, Pakistan and the drilling operations continued at the second commitment well. At Bhit Gas field, second phase of compression (Baby Booster Compressors) successfully installed with an estimated additional production of 10 billion cubic feet (bcf). Technical studies continued to explore the deeper targets in Qadirpur Pakistan.
Other 2015 highlights include achieving first gas from Pelikan field in Natuan Sea Block “A” (NSBA), Indonesia, and water injection and gas lift operations commencement in PM-304, Malaysia..
Pakistan
KUFPEC has been present in Pakistan since 1987 and has invested over US$ 1 billion to make Pakistan a core business center for the company.
The recently acquired Paharpur block is KUFPEC’s second operated asset in the country and is its first in Khyber Pakhtunkhwa, Pakistan. KUFPEC currently has producing interests in Qadirpur, Zamzama, Kadanwari, Bhit, Badhra, Sukhpur and Zarghun blocks and is the second largest gas producer among foreign exploration and production companies operating in Pakistan.
Bhit and Badhra Gas Fields - (KUFPEC: 34 %)
Bhit and Badhra gas fields are located in the Kirthar fold belt area of the Lower Indus basin. During 2016, 14 wells were producing from Bhit and eight wells from Badhra, both with an average production of 7,300 boepd and 5,442 boepd (net to KUFPEC) respectively. In Badhra field, one development well is planned to be drilled during 2017.
Bhit field is in the declining phase but the production was sustained due to installation of Baby Booster Compressors (third phase of compression) which was initiated in first quarter 2016 to recover additional incremental reserves until 2022; the compression project was completed during fourth quarter 2016. These booster compressors ensure maximum drainage of the reservoir at 50 psig suction pressure. During 2017, restaging / relocation of compressors will be done to reduce minimum operating pressure to 20 psig.
Khadro Formation (a secondary reservoir) was perforated at Bhit-16 and produced about two mmscfpd during an extended well testing period of six months. A Bhit Khadro development plan is scheduled to be submitted to the regulator in first quarter 2017. About 38 billion cubic feet of additional reserves are anticipated from the Bhit Khadro formation.
Qadirpur Gas Field - (KUFPEC: 13.25%)
Qadirpur gas field is the second largest field in Pakistan. During 2016, the field produced an average of 6,800 boepd net to KUFPEC. Within our efforts to sustain the production, four development wells were drilled and commissioned during 2016 while four additional wells are planned to be drilled during 2017.
Technical studies were carried out to determine the deeper potential of the field. The joint venture partners are planning to drill Qadirpur Deep-2 well in third quarter 2017.
The Qadirpur development and production lease will expire in 2017. An additional five year extension is available under the Production Concession Agreement. A revised development plan is in progress for submission to the regulator.
Kadanwari Gas Field - (KUFPEC: 15.789%)
Production from the Kadanwari gas field averaged 895 boepd net to KUFPEC, substantially lower than the previous year due to watering-out of some wells and leakages in the Kadanwari-19 flow line. Two more development wells are planned to be drilled during 2017. Plant modifications and upgrades are planned to be carried out in order to increase capacity of the facility along with the restaging and relocation of compressors.
Zamzama Gas Field - (KUFPEC: 9.375%)
Zamzama gas field is on natural decline with production averaging 1,541 boepd during 2016 net to KUFPEC. The operator sold its entire Pakistan holdings to a local company. During 2016, intervention jobs on seven wells were successfully carried out, resulting in increased production.
Drilling, completion and testing of one PAB infill well is planned in 2017, including the restaging of compressors.
Zarghun South - (KUFPEC: 3.75%)
Zarghun South is a small gas field with a current average production of 74 boepd. One development well was successfully drilled and commissioned during 2016 to sustain the production.
Jati - (KUFPEC: 75%)
Jati EL is KUFPEC’s first operated exploration block in Pakistan. The block was awarded on 12 October 2012 with a minimum work program of acquisition of 500 line kilometers of 2D seismic in addition to drilling of two exploration wells. Upon completion of G&G studies and 2D seismic acquisition, two drillable prospects were generated and approved by the joint venture partners. Two exploration wells were drilled which were plugged and abandon with good gas shows.
Paharpur - (KUFPEC: 100%)
Paharpur EL was awarded to KUFPEC as an operator on 13 March 2015. The block which covers an area of about 2,261 km2 is located in the northeastern part of Pakistan in Khyber Pakhtunkhwa province. Existing oil and gas/ condensate fields are present with multiple reservoirs in the north and east of Bannu/Kohat and Potwar basins. The minimum work commitment consisted of 2D/3D seismic acquisition plus two exploration wells. The 2D seismic operations kicked off third quarter 2016 and are expected to be completed by April 2017.
Sukhpur - (KUFPEC: 25%)
Sukhpur EL is located north and east of Badhra gas field. The block was farmed-in during 2010 with a minimum work commitment of 2D seismic acquisition plus two exploration wells. The first exploration well, Lundali-1 was drilled in 2013 and tested 33 mmscfpd from the secondary objective of Khadro formation. Due to limited accumulation, production was terminated in 11 months under extended well testing.
The joint venture partners agreed to drill a second exploration well but drilling was delayed due to community issues. As the block expired in 2016, the joint venture partners applied for a further 12 months extension without any additional work commitment.
Malaysia
PM-304 - (KUFPEC: 25%)
The PM-304 Production Sharing Contract (PSC) is located offshore, east of Peninsular Malaysia. The block contains two producing oil fields, Cendor and West Desaru, in addition to other undeveloped fields, namely Irama, East Desaru, Cendor Graben, East Cendor and Kemasik. The Cendor and West Desaru fields came on stream in 2006 and 2013 respectively. The block benefited from numerous asset improvement projects and maintained production during 2016. KUFPEC’s net share of production from PM304 during 2016 averaged 4,197 boepd. The joint venture partners are aiming to develop the remaining blocks of PM-304 in year 2017.
SB-312 - (KUFPEC: 40%)
During 2016, the post-drill evaluation of the Danum-2 appraisal well was completed, including the drilling of the commitment well, Lakum-1. Work is ongoing to evaluate the future of SB-312 PSC.
DW3E - (KUFPEC: 35% working interest, 41.18% during exploration)
Deep Water 3E (DW3E) is an exploration block located offshore Serawak, in water depths ranging from 200 to 2000 meters. KUFPEC acquired the asset in October 2014, with a work commitment of one wildcat well and one exploration well, as well as acquiring 346 km² of new 3D seismic. The first commitment well is planned to be spudded in first quarter 2017.
SK-410B - (KUFPEC: 42.5% working interest, 50% during exploration)
SK-410B is an exploration block located offshore Serawak in water depths ranging from 50 to 100 meters. The PSC was signed on 22 July 2016, and expires on 21 July 2019, with a work commitment of drilling one wildcat well, re-processing 504 km² of existing 3D seismic, and the acquisition and processing of 500 km² of new 3D seismic. The operator has commenced reprocessing the existing 3D seismic.
Indonesia
Natuna Sea Block A - (KUFPEC: 33.33%)
The Natuna Sea Block A (NSBA) PSC is located in the Indonesian Natuna Sea and has been supplying gas to Singapore from the Anoa field since 2001 and the Gajah Baru field since 2011. The Naga field commenced first gas production in November 2014 and Pelikan achieved first gas production in March 2015. The Anoa West 1 appraisal well was drilled to appraise the Lama formation and was plugged and abandoned; results are currently under evaluation. The joint venture partners agreed to re-complete well 5X-L into a deeper formation in 2017. Further project development programs are ongoing to backfill gas supply to Singapore and the domestic market contracts. KUFPEC’s net share of production from NSBA during 2016 was 11,791 boepd.
Seram - (KUFPEC: 30%)
The Seram PSC is located to the east of Seram Island near West Papua. Since 2002 oil has been produced from the Oseil, Nief Utara-A, and Oseil Selatan fields. Lofin appraisal confirmed a gas discovery in the PSC. The joint venture submitted to the regulatory authority a proposed PSC extension for further negotiation. KUFPEC’s net share of production from Seram during 2016 was 1,068 boepd.
Offshore Northwest Java - (KUFPEC: 5%)
The Offshore Northwest Java (ONWJ) PSC is located offshore northwest Java. The ONWJ complex holds 51 oil and gas fields, and during 2016 KUFPEC decided to continue its non-participation in most of exploration and development activities due to PSC expiry in first quarter 2017. In November 2016 the regulatory authority decided not to grant PSC extension to the current joint venture. KUFPEC’s net share of production from the ONWJ PSC was 1,794 boepd in 2016.
Southeast Sumatra - (KUFPEC: 5%)
The Southeast Sumatra (SES) PSC is located offshore southeast Sumatra. The SES complex contains 34 oil and gas fields. During 2016, the joint venture focused on maintenance and work over projects to sustain production until the PSC expiry in 2018. The joint venture submitted a proposed extension of the PSC expiry to the regulatory authority for its approval. KUFPEC’s net share of production from SES during 2016 was 1,511 boepd.
Buton - (KUFPEC: 30%)
The Buton PSC awarded in 2007 covers an area of 3,047 km² that extends both onshore and offshore Buton Island southeast of Sulawesi. Gravity, magnetic and seismic surveys were acquired in 2008/2009. During 2012 all remaining commitments were fulfilled with the drilling of one exploration well (Benteng-1) which had sub-commercial oil shows. Due to this discouraging result, KUFPEC and the operator relinquished this block in 2016.
Ephindo - (KUFPEC: 40% of Ephindo Company)
During 2013 KUFPEC acquired 40% of Ephindo Energy Pte. Ltd., which holds varying interests in seven Coal Bed Methane (CBM) projects. These CBM PSCs are located in east Kalimantan and south Sumatra, and primarily in the exploration and appraisal stage. KUFPEC is further evaluating the potential of the project to come up with a future strategic plan.