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GEARING FOR THE NEW MILLENNIUM - UNVEILING
THE PETROLEUM
Petroleum Unit, April 2001
LAUNCHING CEREMONY It is a great honour and a historic moment for Brunei’s Oil and Gas industry to have His Royal Highness Crown Prince Haji Al-Muhtadee Billah to officially launch the new areas for the exploration and production of oil and gas in Brunei. The ceremony was held on 29th January 2001 at the International Convention Centre, Berakas, Brunei Darussalam. Besides marking a significant milestone in the growth of the country’s century old history of oil and gas exploration, the presence of the Crown Prince in the launching ceremony was indicative of the level of importance that Brunei placed on the opening of the new areas. 3 sizeable blocks were released, 2 of which were in the deepwater, named Blocks J and K, 5,020 and 4,944 square kilometres respectively. The onshore/shallow-water Block L (2252 square kilometres), however, comprises previous concession areas of Jerudong, Tutong and Brunei Muara. In his royal address, HRH Crown Prince Haji Al-Muhtadee Billah said, "The opening of these new areas and the competitive open bidding indicate the continued commitment of His Majesty’s Government for sustainable growth in the oil and gas sector, and to encourage an atmosphere of healthy competition in the industry." The Crown Prince further added that "such an atmosphere is important to cultivate favourable business partnership, one that is based on mutual confidence, trust and close cooperation." Senior corporate representatives, business development managers, legal advisers, consultants and exploration and new-venture management teams from 25 international oil companies witnessed the event with much enthusiasm and promise, many of whom remarked as the long-awaited exploration round from Brunei.
Among the delegates of the ASEAN region were Petronas Carigali from Malaysia, PPT Exploration and Production from Thailand, Pertamina E&P from Indonesia, and Vietnam Oil and Gas. A 2-day Conference, 3-day Exhibition, and 2-day Geological Excursion were also held in conjunction with the launching ceremony. Besides the international oil companies, existing petroleum operators in Brunei, local oil and service companies, senior government officials, penghulus and foreign envoys based in Brunei were also present at the ceremony. CONFERENCE Senior officers from the Petroleum Unit chaired the 2-day Conference. 15 presentations were deliberated by speakers from the Petroleum Unit, Department of Petroleum Geoscience of Universiti Brunei Darussalam, Brunei LNG, Brunei Shell Petroleum, Fletcher Challenge Energy Borneo, Total Fina Elf Exploration and Elf Asia BV, Petroleum Geo-Services Asia Pacific and Surface Geochemical Services AS.
The following is the coverage of the conference:
Speakers from the Petroleum Unit deliberated on Brunei’s Model Petroleum Agreement (based on the Production-Sharing Contract (PSC)) and its Fiscal Terms, the Petroleum Prospectivity of the Deepwater and Onshore areas, Bidding Guidelines and Data Packages, and the Master Plan for the Downstream oil and gas industry. Speakers from the current operators of the concession areas onshore and offshore Brunei, on the other hand, shared their technical experience with delegates of the conference in the exploration for oil and gas in the sultanate. Universiti Brunei Darussalam department of geoscience provided insights to depositional systems of petroleum reservoirs in the country. Brunei LNG highlighted on their master plan to synergise anticipated growth in the sector, especially in the deepwater frontier areas. 3-D seismic and geochemical surveys in the deepwater areas of the EEZ were also deliberated. The talks were expected to trigger scope for accelerating discovery and production in Brunei’s future exploration venture especially in the frontier areas of the deepwater.
The conference was also meant to capture the interest of the participants on the terms, procedures and guidelines of the New Petroleum Agreement that was revised from an earlier version presented at the pre-launching session held at the Setia Pahlawan Conference Hall, Ministry of Industry and Primary resources, Brunei Darussalam, in October, 2000. During the pre-launching session, similar sets of presentations on the terms were made to the oil companies disclosing preliminary features of the agreement. In attempting to develop terms mutually acceptable for the new agreement, industry input was invited.
Hj Mohd Anas made the deliberation of the Model Petroleum Agreement and the Fiscal term. It was not surprising that companies who attended the pre-launching session in October last year, were anxious to listen to any change to the new model PSC that had come back from the feedback they gave to the Government. "The oil companies, for their part, were there hoping to be rewarded with an announcement from the Petroleum Unit that the Model Petroleum Agreement unveiled last October would be improved – and they were not disappointed." reported Amanda Battersby in the 9 February 2001 issue Upstream magazine. The launching ceremony also marked the opening of the areas for bidding. In his presentation on Bidding Guidelines and Data Packages, Pengiran Hj Harun, Head of Exploration, Petroleum Unit, pointed that purchase of data package offered by the Petroleum Unit is a prerequisite to bid for respective areas. 2 data packages were made available to interested companies; namely the onshore and the offshore-deepwater packages. In his talk, he also highlighted that the exploration period consists of two phases; 5 (five) year followed by a 3 (three) year exploration terms, in which no relinquishment of the areas is required until the end of the 8th (eight) period. He also mentioned that the closing of the bid would be 1 November 2001. Hj Iskandar Hj Yahya, Head of Exploration Joint Venture/Open Areas Unit, Petroleum Unit, presented the prospectivity of the offshore deepwater and onshore areas. He showed some slides of data in the deepwater areas with several attractive prospects for commercial petroleum discoveries. He also elucidated that exploration in this area would focus much on turbidite play, but, he asserted that the risks in this play would possibly be the nature of the turbidites and their reservoir quality. Reporting briefly on the progress and the product of the recent 3-D seismic survey over Brunei’s Exclusive Economic Zone (EEZ), he was confident of the high hydrocarbon potential of the areas by confirming that several structural closures of considerable sizes were identifiable. The onshore block, however, is relatively under-explored and may hold potential of hydrocarbon discoveries at commercial quantity, he added. The main task now, is to have the new play concepts, especially identified over the Berakas syncline, to be supported by modern seismic data as a key to confirm the play and a tool to define additional targets. Dato Paduka Hj
Hamdillah, CEO of BLNG in his
presentation said, "Brunei is Companies who had reservations to the large gas potentials that they believed would be the case for the deepwater blocks, may be relieved to hear of the ready gas market and the established LNG industry with its expansion master plan.
EXHIBITION More than 30 exhibitors, most of them local oil and gas service companies participated in the 3-day Oil and Gas Exhibition at the Exhibition Main Hall, International Convention Centre, Berakas, Brunei Darussalam. The event has provided an excellent opportunity and platform for the local oil and gas service companies to showcase their products and services. Additionally, business-matching was also orchestrated by the organiser.
Exhibitors, now had a levy of being exposed to opportunities for discussions with companies to explore and develop future business relationships, especially with petroleum companies that may be potential candidates for operating in the newly released exploration blocks L, J and K.
The management of the exhibition was contracted to a local firm, Transpower Corporation. The chairman of the organising committee, Dato Paduka Hj Ahmad Hj Ibrahim who is also the Director of the Petroleum Unit, said that "an exposure of this nature helps create an impetus to the local petroleum service communities to plan for their companies’ future development and expansion as spin-offs to the opening of the new areas." "This move is positive and will certainly assist growth in the private oil and gas sector of the economy" he added.
GEOLOGICAL EXCURSION In conjunction with the promotion of these new areas, the Department of Petroleum Geoscience, Universiti Brunei Darussalam conducted a field excursion to selected geological sites in the Brunei-Muara district to familiarise the participants with outcrops important to the understanding of the nature of petroleum reservoirs in the country. They have been guided through series of formations found in these sites by a group from the department.
3-D SEISMIC SURVEY Brunei Darussalam has embarked on one of the
largest single three-dimensional (3-D) seismic survey in the
world, conducted in a new frontier, last
In planning for the survey, the Petroleum Unit expected that the availability of the 3-D data would have direct impact on the value of the blocks being offered. A full coverage of modern 3-D seismic with fine bin-size over the areas offered by the government for bidding means that companies would have obtained complete subsurface image of the areas vital for their delineation of prospects at a very early stage. A favourable time factor that is crucial in trying to accelerate exploration and production can be met. Drilling campaigns for exploration, appraisal and development wells can be planned much early and effectively. The Petroleum Unit is also anticipating that operators of these blocks may develop co-operative campaigns that are more cost-effective than attempting to traditionally run them independently. Although, the licensing of 3-D seismic data is not a pre-requisite to bid, many interested companies are likely to acquire them to facilitate in their formulation of a more competitive evaluation and bidding packages to be proposed to the Government. The released Brunei deepwater blocks and the 3-D seismic survey do not only capture attention in the region, but claimed to be a potential global hot spot. "Brunei may be another potential hot spot with 10,000 sq. km. up for grabs in a new licensing round. ......It will be a popular round if the number of companies interested in the data is anything to go by", reported Hart’s E&P magazine, March 2001 issue. A source from PGS said that "Final data will be ready for delivery to the client nine months after first shot point and will ensure that oil and gas companies bidding for the acreage in the licensing round will have sufficient time to make full use of the 3D in their bid".
GEOCHEMICAL SURVEY Planning for the release of the new areas was not singly and independently viewed. It was actually developed with multi-prong strategies to value-add the areas under offer for bidding. These approaches were integrated to form a consolidated framework to enable the Government to formulate plans for the growth of the local oil and gas industry in the new millennium. In yet another concerted effort by the Government to stimulate growth and enhance the prospect of these areas, another survey over the deepwater blocks has begun in early April 2001. A non-exclusive geochemical survey is currently being undertaken in the deepwater blocks covering the same 10,000 square kilometers as the 3-D seismic survey. Surface Geochemical Services AS (SGS) of Norway has been contracted by the Government of His Majesty to embark on the project. Geochemical samples will be taken from the sea-floor and analysed. At least 3 oil companies have pre- committed to the purchase of the geochemical report. Surface geochemical exploration for petroleum is the search for chemically identifiable surface or near-surface occurrences of hydrocarbons, or hydrocarbon-induced changes, as clues to the location of oil and gas accumulations. Among other things, the studies should be able to determine whether hydrocarbons have been generated in the basin. These studies should also be able to differentiate if it is oil or gas, the source type and its maturity. Similar to the 3-D seismic survey, purchase of the geochemical survey report or data is not a pre-requisite to bid.
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NEW
AREAS OF BRUNEI
DARUSSALAM.
In an opening speech at the launching
ceremony, the Minister
of Industry and Primary Resources, Pehin Haji Abdul Rahman Bin Dato Setia Hj
Mohd Taib, who is also the Chairman of Brunei Oil and Gas Authority (BOGA) said
"In developing mutually acceptable terms for the PSC, His Majesty’s
Government had presented the indicative PSC terms to the respective oil and gas
companies on the 23rd
of October last year. The companies were then invited to review
the PSC terms and give their feedback to the Government". "The comments received have been analysed and as a
result, appropriate modifications and several strategic
initiatives were made to the PSC to make the terms more
attractive and viable", he added.
financially robust and
politically and socially stable; these are ingredients necessary
to gain the confidence of potential investors." "BLNG
would be investing around B$2.4 billion over the next 13 years to
construct 4 million tonne per year train and to rejuvenate its
existing plant to extend its life to 2033. In addition, around
B$2.1 billion would have to be spent to build 6 new A-class
(135,000 m3) ships." he further disclosed BLNG’s plan.
August 2000. The acquisition of the 10,000 square kilometers 3-D seismic data over
Block J and K in the deepwater areas of the Brunei Exclusive Economic Zone is
expected to complete in early April 2001. Petroleum Geo-Services (PGS) of Norway
was contracted by the Government of His Majesty on the 29th July 2000 to execute
the project in close co-operation with the Petroleum Unit of the Prime Minister’s
Department. PGS’s seismic vessel Ramform Challenger was mobilised to carry out
the acquisition programme. The high-technology vessel is equipped with on-board
processing facilities, and geared to tow 10 recording streamers, each 6,000
meters long.