New York-listed upstream independent Indonesia Energy Corporation (IEC) is negotiating an extension for its producing Kruh block onshore Sumatra, Indonesia, where it is hoping to exploit gas alongside the already flowing oil.
IEC unexpectedly found evidence of a 30-feet net potential natural gas-bearing reservoir when drilling the Kruh-28 well — initial evidence that was supported by both wireline logging and geologic logging data, and subsequent gas flaring. If a commercial amount of gas is tested in the Kruh-28 well, a development plan will be submitted for approval to the Indonesian authorities with the goal of commencing gas production in 2024.
The indie is currently working over the existing Kruh-21 well, which was drilled eight years ago, to maximise production from the block. Oil is expected to flow again from this well and from Kruh-28 in the third quarter.
IEC wants to secure a five-year extension for the Kruh block with the new contract set to expire in 2035. This extension would give the operator 12 more years to fully develop the existing three oilfields and five other unexploited oil and gas-bearing structures on the onshore asset. IEC has submitted its related work programme proposal, which has been accepted by state-owned oil company Pertamina and upstream regulator SKK Migas, and is waiting for the draft contract to be approved.
“To accommodate for the required additional time needed to maximise the Kruh asset, we have commenced negotiations with the government to extend the contract term of the Kruh block,” confirmed IEC president Frank Ingriselli.
Drilling plans
The operator in 2021 and 2022 made several new oil discoveries on the Kruh block and is moving to acquire new 3D seismic over 30 square kilometres of the acreage. After completion and full interpretation of this seismic, IEC intends to restart its continuous drilling campaign on the block, with plans to drill and complete 14 more wells by the end of 2026, one year behind its earlier schedule.
IEC believes that this new work at Kruh Block, together with what it learned from last year’s oil and gas discoveries, will greatly assist it in determining the optimum well locations for this drilling campaign. The company said the aim of this drilling programme is to both develop the one formation currently being targeted and also look at developing “what appears to be at least three additional oil formations that could contain significant commercial quantities of oil and natural gas”.
“We are pleased… with the two back-to-back oil discoveries and the potential new gas find. We believe that Kruh is a world class asset and, in order to maximise future production capability, we have commenced on our programme of conducting seismic operations across the entire block so that we can positively leverage what we have learned from our recent discoveries, including our gas discovery, and look to determine the best locations to start our continuous drilling campaign,” added Ingriselli.
Meanwhile, on IEC’s 1 million-acre Citarum block — also onshore Indonesia — the environmental permit for a 2D seismic survey is in the final approval process. The company expects to receive the permit in the third quarter, which would allow it to begin data acquisition work before year-end.
