Indonesia’s oil and gas regulator, SKKMigas, announced on Tuesday that it has selected winners for engineering, procurement, construction and installation in the development of Jangkrik and Northeast Jangkrik natural gas fields. Both fields are part of the Muara Bakau block, located off East Kalimantan’s coast. The
Indonesia's oil and gas regulator, SKKMigas, announced on Tuesday that it has selected winners for engineering, procurement, construction and installation in the development of Jangkrik and Northeast Jangkrik natural gas fields.
Both fields are part of the Muara Bakau block, located off East Kalimantan's coast. The announcement marks the country's first real progress in its attempt to tap hydrocarbon reserves located in deep water.
The regulator had awarded at least three contracts for deepwater projects but real progress had been slow and Muara Bakau block was the only project that had seen significant progress. Italy's Eni is the operator of the block with 55% interest, while France's GDF Suez controls the remainder.
Tripatra Engineers and Constructors, Chiyoda International Indonesia, Hyundai Heavy Industries, a consortium of Technip Indonesia-Technip Geoproduction and FMC Santana Petroleum Equipment Indonesia are the winners for the $4.13 billion contract to develop the fields, the regulator's chief Johannes Widjonarko said. SKKMigas estimates the development of fields to generate revenue of $5 billion for the state.
“Both fields are expected to commence production by early 2017 with peak output estimated at 450 million cubic feet of natural gas per day for six years,” Johannes said, adding that both fields had enough reserves to sustain production for 14 years.
Though there are no official definitions, deepwater is usually defined as reserve deposit located at more than 500 meters below sea level.
Indonesia has been looking to offshore projects to compensate for the rapidly declining output from aging onshore fields. But development of offshore — especially deepwater — project had been slowed as it typically costs more than onshore projects.