Repsol and Petronas are on track to drill the much-anticipated Rencong-1X wildcat in the frontier deep waters of Indonesia’s North Sumatra basin.
The region, which is essentially undrilled, offers the potential for big gas discoveries. Indeed, if successful, the wildcat could help unlock the deeper areas of basin, which sits on the northern part of Sumatra island stretching from onshore Indonesia to the deeper sections of the Andaman Sea.
Having secured a drillship, Repsol and Petronas, armed with extensive seismic data integrated with prospects and leads, are planning to drill Rencong-1X later this year offshore Aceh. The probe is targeting potential giant gas pockets in the Andaman III exploration Block in waters 1500 meters deep. The wildcat was due to be drilled in 2019 but was delayed due to a farm-in process that saw Petronas take a 51% stake in the block. A plan to drill in 2020 was derailed by the COVID pandemic.
Crucially, only a few wells have been drilled in the deeper areas of the basin, but none of them confirmed a commercial discovery. The nearest wells to Rencong-1X are Emerald-1, drilled by Eni in 2008, and Bundong Jeumpa-1, drilled by Lasmo in 2000. Neither well gave any encouragement as to the presence of good reservoirs or hydrocarbons, beyond relatively normal minor amounts of gas in thin sands.
The entire Andaman Sea area from Aceh to the Gulf of Martaban (Myanmar), which includes the North Sumatra basin in the south, has no known oil generating source rocks. Only gas accumulations, such as Arun and Yetagun, are known. Therefore, a deep-water gas accumulation is possible, but the presence of good reservoir is a major risk.
“I suspect that this wildcat well must be judged as very high risk when assessing its chances of finding a commercial hydrocarbon discovery. It has become unusual to see such a high-risk well being drilled in the Southeast Asia region. So, it’s great to see a well like this being drilled, but very few companies would fund such an exploit,” a geologist focused on Southeast Asia, told Energy Voice.
Significantly, the success of this well could open up many petroleum plays in the deeper sections, which are already estimated to hold a majority of the gas resources in the basin, said Sohini Chatterjee, an upstream analyst at Rystad Energy.
Moreover, a commercial discovery could pave the way for more companies, such as Premier Oil, Mubadala Development and BP, to explore the relatively untouched deeper plays in the country, that has so far been characterised by discoveries made primarily in the shallow waters and onshore plays, said Chatterjee.
“Exploration drilling started in the basin in the late 1900s with multiple oil and gas discoveries registered in the fluvial-deltaic sandstones and shallow marine limestone reservoirs. The deep-water petroleum plays, however, have remained relatively unexplored even though geophysical studies and seismic image interpretations have indicated the presence of multiple working petroleum systems in the deeper section of the basin, capable of holding movable hydrocarbons within them,” said Chatterjee.
Repsol and Petronas have identified four possible petroleum play segments through 3D
seismic surveys in the 8,000 sq km block, namely the late Eocene-Oligocene platform limestones, the Oligocene sandstones, the Miocene carbonates, and the Mio-Pliocene thrust bound clastics.
“Based on the seismic patterns and other geological underprints, the carbonates are interpreted to be deposited under calm shallow-water carbonate ramps accumulated
on structural highs during the Eocene-Oligocene time during which major structural deformations took place in the basin,” said Chatterjee.
However, the Rencong-1X well mainly targets the Eocene-Oligocene carbonate buildups on the basement highs surrounded by marine shales.
Other than the Rencong-1X well, two more exploration wells are planned to be drilled in the deeper parts of the basin. One exploration well will be drilled on the Andaman II block, which is operated by Premier Oil, on behalf of its partners Mubadala Development and BP. Mubadala is also planning a probe on its South Andaman Block, which it shares with Premier Oil. Both exploration wells target similar carbonate reservoirs as the Rencong-1X wildcat. However, the spudding of these exploration wells will be highly dependent on the results of the Rencong-1X well, cautioned Chatterjee.
“The wildcat is of great importance to the country since it holds the potential to de-risk the deeper obscure petroleum reservoirs in the North Sumatra basin. If there is a commercial discovery, it could easily be connected to the nearby well-established infrastructure since Indonesia has well-developed LNG terminals and gas infrastructure,” added Chatterjee.
Indonesia is desperate to revive its upstream sector, which has been in the doldrums for years. Indeed, Indonesia’s gas production is projected to drop significantly in the medium term without new investment. At the same time, domestic gas demand is set to climb.
A commercial gas discovery in Indonesia’s frontier acreage would provide a welcome boost to the country’s hydrocarbon portfolio.