T

he Joint Operating Body (JOB) Pertamina-Petrochina Salawati is considering halting operations in West Papua pending the result of drilling activities in the resource-rich area.

The company says it hopes the drilling activities will bring positive results as it will determine the firm's next move.

So far, the company has drilled two wells ' Zircon-1 and Koi-2 ' this year. The drilling of the Zircon-1 well, which has cost US$9 million, has been completed, but the company has found no oil reserves.

JOB Pertamina-Petrochina Salawati field manager Nusdhi Septika Putra said the company planned to move the drilling around 1 kilometer from the original spot. Before the drilling begins, activities in the Koi-2 well will be finished.

'Zircon and Koi-2 have become the benchmarks of whether or not to continue our contract,' Nusdhi said.

'There's potential to be developed, but some of it is possibly uneconomical. If offshore drilling is successful, that won't be a problem.'

He said the result of the Koi-2 well drilling was expected this week or next.

JOB Pertamina-Petrochina Salawati is 50 percent owned by PT Pertamina Hulu Energi Salawati, 16.78 percent by Petrochina International KB Ltd., 14.5 percent by RHP Salawati Island BV and 18.7 percent by Petrogas Island Ltd. Petrochina is the operator of the block, which is called Salawati Kepala Burung.

The JOB's contract began in April 1990 and will expire in April 2020.

The joint operation has 40 active wells, with oil production reaching 1,491 barrels of oil per day (bopd).

The company had targeted an average production volume of 1,700 bopd by year-end, but cut that number to 1,600 bopd due to various reasons, including high rainfall, hard terrain in remote areas and a lack of well repair services.

Most of its production is now only in onshore areas. The JOB is struggling to develop offshore areas as onshore production has reported a natural decline in production by 25 percent per year.

JOB Pertamina-Petrochina used to have offshore activities in Salawati, specifically in an area called TBA. However, production was closed in 2011 after four years as the renting of floating production storage and offloading (FPSO) could not be afforded.

The previous FPSO lessor increased rent by two fold as demand for services grew, leading the JOB to look for a new FPSO.

The JOB is considering reopening its gas well in an offshore area called TBC field.

'We closed the gas well in the past as there was no buyer for the gas. We're negotiating with a company owned by the Raja Ampat local administration, which is working on its electricity problem,' Nusdhi explained.

The gas well is estimated to be able to produce 25 million cubic feet per day (mmscfd) and is expected to be operating by 2018, if the JOB finds a buyer.