Total E&P Indonesie to Develop 2 Offshore Gas Fields in East Kalimantan

Total E&P Indonesie, a wholly owned subsidiary of Paris-based energy giant Total Group, has announced the development of two offshore gas fields in the Mahakam block, East Kalimantan.

Kristanto Hartadi, Head of Media Relations at Total E&P, said the company was developing the Sisi Nubi 2B and Peciko 7B oil and gas fields.

The projects are estimated to cost up to $2 billion.

“According to the approved plan of development, in Peciko 7B, we will drill 23 additional wells and in Nubi 2B, there will be 35 additional wells,” he said in a statement on Thursday.

The development of the two fields began in August and has involved 1,200 people.

“Production is targeted to come on stream by the second half of next year,” Kristanto said.

Total has been in Indonesia since 1968, operating the Mahakam block together with its Japanese partner Inpex — each with 50 percent interest.

Together they supply most of the gas to the Bontang liquefied natural gas plant.

Last year Total produced about 1.87 billion cubic feet per day of natural gas and 67,000 barrel of oil per day.

The French investor has warned that a drastic decline in production at East Kalimantan’s Mahakam gas block looms unless the government makes clear the project’s future beyond the end of their contract in 2017.

Total E&P’s senior vice president Jean-Marie Guillermo said the government had been dragging its feet on what will happen post 2017 since 2007.

Guillermo said in July the company planned to invest about $7.3 billion before 2017 to take steps to minimize production decline in the block.

T otal E&P Indonesie and their partner Inpex, have since 2011 deployed increasingly expensive means to arrest the decline, including additional rigs and advanced technology.

Nearly one-third of the country’s gas pr o duction is carried out in the Mahakam block.

Guillermo said that even if the necessary investments are made, production will still decline.