South Block A PSC receives extension

Renco Elang Energy's (REE) South Block A production sharing contract (PSC) in north Sumatra, Indonesia was granted at 19-month exploration extension from the Indonesian Ministry of Energy and Mineral Resources. 

According to Peak Oil & Gas, the PSC is scheduled to end December 2016, allowing contractors more time to drill one exploration well in order to fulfill the contract.

Located in the North Sumatra Basin, South Block A PSC  is surrounded by large producing fields, including the Arun gas field. It has potential for both oil and gas development, with both commodities in strong demand within Sumatra. It comprises of over 2,100sq km exploration acreage with over 80 oil and gas fields. According to the United States Geological Survey (USGS), the area holds about 1900 MMbbl of oil and 34 Tcf of gas.

Drilling by Asamera from the 1970s through to the early 1990s produced indications of oil and gas in several wells in the area.

A new gas pipeline has been constructed between Lhokseumawe and Medan in Sumatra, passing through South Block A, which has a capacity of 400 MMscfd. It will transport gas from the Arun gas facilities, including an LNG receival terminal currently being built.

The pipeline is located close to key prospects within the PSC providing a new incentive for gas exploration in the area, as a potential contribution to the increasing energy demand.

This could assist in commercializing any gas discovery the South Block A partners may make through its drilling program.

REE is operator of the South B block A PSC with a 51% interest with partners KRX Energy (SBA) Pte (35%) and PT Prosys Oil and Gas (14%). Peak’s 75% shareholding in REE equates to a net economic interest of 38.25%.

Image: Map of South Block A PSC. From Peak Oil & Gas.