PKM IMATION - Feasibility Improvement of the Cepu Gas Project Through Optimization in the Development Scenario at the Jambaran-Tiung Baru Field

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PT Pertamina EP Cepu (PEPC) is a subsidiary of PT Pertamina (Persero) which is engaged in the upstream oil and gas industry covering exploration, exploitation and sales of oil and gas by the development of the Cepu Block.

PEPC was founded in 14 September 2005 with the purpose of developing the Cepu Blockby cooperation with Mobil Cepu Limited, Ampolex, and regionally-owned enterprises (BUMDs), and in which PEPC holds a participating interest (PI) of 45%.

One of the many projects managed in the Cepu Block is the Cepu Gas, covering the development of the Jambaran-Tiung Biru (JTB) field and the Cendana field. The Cepu Gas Project has secured the approval of BP Migas (now SKK Migas) for development with the approval of the Plan of Development (POD) and PEPC has been designated the operator. Discovery of the reserve in Jambaran-Tiung Biru field was acquired from the Jambaran-4 exploration well and the Tiung Biru-1 well. The outcome of well testing on both wells indicated with certainty that the JTB & Cendana fields had the potential to produce gas in vast quantities and are highly production worthy.

During the project initial planning, the JTB & Cendana fields were forecast to produce 315 MMSCFD of gas for 16 years. However, during the project development period a concept change occurred which led to a delay that might cause the project to become uneconomic to run. Consequently, a strategy was required to meet the targets of the Cepu Gas project. One such effort is to optimize the capital expenditure (capex) of the production facilities by pulling out the development of the Cendana field from the Integrated JTB & Cendana gas Project. This pull-out brought about a new challenge in meeting the commitment to the POD. A gas supply of 315 MMSCFD for 16 years which had previously been planned from the production of two fields (JTB and Cendana) is now reduced to one field only (JTB).

Using the field development method concept in accordance with the POD and based on the outcome of evaluation conducted by the partner, a gas supply of 315 MMSCFD would only cover a period of 13.5 years.

In connection thereto, the PKM ImaTion thought up a plan to make breakthroughs for the Cepu Block to remain economical to run, consistent with the commitment set in the POD by optimizing a development scenario on the JTB field involving reservoir, engineering, planning and evaluation (Reneval) disciplines.

Optimization at reservoir level was conducted by optimizing the number of production wells required and optimizing the tubing size and perforation interval. At engineering level, optimization was introduced on the size of the flowline to reduce surface pressure loss. These efforts at optimization were reviewed systematically and documented by the Reneval function to ensure that the measures taken would maintain the Cepu Gas project as an economic venture to meet the commitment set forth in the approved POD. The optimization hatched by the PKM ImaTion will turn the Cepu Gas project to produce 315 MMSCFD for 16 years with a potential profit increase of US$ 154,770,690 into the state's coffers.