Australian-based Neon Energy has signed a production sharing contract for the Tanjung Aru Block, offshore Indonesia.
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The contract was signed with a joint venture consortium comprising Neon Energy, which has a 42% stake, KrisEnergy as operator with 43%, and Natuna Ventures with 15%.
The block is located in a relatively underexplored area of the Kutei Basin, one of Indonesia’s most prolific hydrocarbon provinces with more than 12 billion barrels of oil equivalent.
The contract was awarded through a tender, following an extended joint study conducted by the consortium in cooperation with regulatory authority MIGAS.
The Tanjung Aru block covers 4,200km2 offshore Kalimantan, in water depths ranging from 20m to over 1,000m.
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By GlobalDataThe contract has an initial three-year term, with an associated work commitment of 500km2 of 3D seismic acquisition and processing, which will begin in 2012 and will be designed to define prospects for drilling in the second three-year term.
The joint venture has already identified multiple petroleum plays in shallow and deep water, each with the potential for commercial accumulations of gas/condensate and/or oil.
Several leads are evident from the existing 3D seismic volume available within the block, and are likely to contain prospective resources well in excess of the minimum economic field size (MEFS).
The MEFS is viewed to be low as a result of the favourable frontier contract terms, proximity of the block to infrastructure, and increasing domestic gas prices.
Neon Energy managing director Ken Charsinsky said that the addition to Neon’s diverse portfolio highlights the company’s disciplined approach to new venture acquisition.
"We look forward to working with our partners as we mature the first exploration phase of this block, commencing with the 3D seismic survey next year," said Charsinsky.
Caption: The Tanjung Aru block covers 4,200km2, offshore Kalimantan.
