Santos switches to gas only offshore Indonesia

Australia’s energy company Santos, with its partners Cue Energy and Singapore Petroleum Company, has approved a project to extend the life of the Sampang producing area.

The Sampang Sustainability Project (SSP) aims to extend field life by at least 2 years to 2020 or beyond.

According to Cue Energy, which owns a 15 percent stake in the project, the initiative will involve switching the Oyong and Wortel Fields to a gas only production system and ceasing uneconomic oil production.

Operator production forecasts based on implementation of the SSP show an increase of 2P reserves of ~17 billion cubic feet (bcf) associated with the life of the Wortel and Oyong fields.

The current project schedule estimates switching to gas only operations in September 2017 allowing both the Floating Production Storage Offloading vessel, Seagood, and the Floating Storage Offloading vessel, Surya Putra Jaya, to be decommissioned in the fourth quarter of 2017. This should reduce total annual production costs from circa $50 million in 2016 to about $22 million by 2018, Cue said.

“The extension of low cost gas production from Sampang will provide Cue with continued, stable, positive non-oil linked cash flows which protect the Company from low oil prices,” the company added.

Drilling in 2018

The existing reservoirs for the Oyong and Wortel Fields are in structural and structural/ stratigraphic trap closures in the Mundu Formation. The joint venture has reviewed other Mundu Formation prospects, including the Paus prospect, which is believed to be a low risk prospect and potentially a drilling candidate in 2018.

The joint venture is yet to make a its decision to proceed with this near term exploration potential but if drilling is approved and is successful, Paus could be tied back through the Oyong facilities and further extend the gas production from the Sampang PSC for many years, Cue added.