Wortel Project in Indonesia Approved for Development
Santos today announced the final investment decision approving development of the Wortel gas project, located offshore Madura Island in the Sampang PSC, East Java, Indonesia.
Wortel is the next project in Santos' East Java near-field development strategy and adds to the company's existing producing assets in the region, Maleo and Oyong.
Wortel is located seven kilometres west of the Santos-operated Oyong oil and gas field, which has been on production since 2007. Wortel will be developed as a tie-back to Oyong, thereby maximising the value of both assets.
The scope of the Wortel development includes two gas wells, a minimum facility wellhead platform and a 10-kilometre gas pipeline to the existing Oyong well-head platform. Wortel gas production will then flow through the existing 60-kilometre pipeline to the onshore gas processing facility at Grati for processing and onward sale. Wortel gas will be sold to PT Indonesia Power under an agreement signed today. Negotiations with other potential buyers are ongoing.
Wortel development costs are estimated at US$100 million gross. First gas is expected by the end of 2011. Gross gas production rates from the combined Oyong and Wortel fields are expected to be about 90 mmscf/d at plateau. Oyong currently produces about 60 mmscf/d gross of gas and 3,500 barrels per day gross of oil.
President Santos Indonesia, Marjolijn Wajong, said the Wortel project was a significant addition to the company's core East Java asset position.
"Wortel is an important milestone for Santos Indonesia, adding another operated project to our portfolio. Combined with our existing production from Maleo and Oyong, the approval of Wortel demonstrates Santos' firm commitment to supplying gas for the growing domestic market in Indonesia," she said.
Santos' share of Wortel proved and probable reserves is approximately eight mmboe.
Santos has a 45% interest in the Sampang PSC and is the operator. Other participants are Singapore Petroleum Company (40%) and Cue Energy Resources (15%).
A map of Santos' East Java assets is attached.
Santos (ASX Ltd - ordinary shares code STO) is a major Australian oil and gas exploration and production company with interests and operations in every major Australian petroleum province and in Indonesia, Papua New Guinea, Vietnam, India, Bangladesh, Kyrgyzstan and Egypt. Santos is Australia's largest domestic gas producer, supplying sales gas to all mainland Australian states and territories, ethane to Sydney, and oil and liquids to domestic and international customers.
Through its interest in the Darwin LNG project, Santos is a producer of liquefied natural gas which is exported to customers in Japan. Santos is developing a major LNG plant at Gladstone in Queensland and is a partner in the PNG LNG project. The Cooper Basin, which Santos and its joint venture partners have developed, is Australia's largest onshore resources project.
Santos has built a strong and reliable production business in Indonesia and is further developing its Asian business through development projects and exploration investment.
In 2009, Santos' total production was 54.4 million barrels of oil equivalent. We have the largest Australian exploration portfolio by area of any company - 133,800 square kilometres. Santos has about 2,200 employees working across its operations in Australia and Asia. At 31 December 2009, Santos had a total market capitalisation of approximately $12 billion, making it one of Australia's Top 30 companies.
Published 26/11/2010
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