Eni Has Go-Ahead for Indonesian Project
Italian producer, Eni, has government approval to start work on the Merakes development project in Indonesia, it said December 17. Merakes, in the Kutei Basin, offshore East Kalimantan, will entail drilling and constructing subsea wells with a dedicated transportation system in 1,500 metres of water and connected to the Jangkrik floating production unit 35 km to the northeast.
Gas will be shipped to the Bontang LNG plant using also all the other existing facilities of the Jangkrik field, as well as the East Kalimantan transportation network. This new production will contribute also to the life extension of the plant, Eni said.
Eni's final investment decision comes just days after the conversion to the gross split scheme of the East Sepinggan production-sharing contract and the approval of the revised field development plan by the energy ministry.
The gross split scheme is a new invention brought in to make offshore operations more attractive when there is no infrastructure. Investors pay tax only when profits have reached a pre-arranged level.
Eni's CEO, Claudio Descalzi, said it was "an important part of its strategy in southeast Asia aimed at increasing both our presence and our production only through organic growth. In order to do so, we will leverage on exploration, which will enable us to increase our reserves first, and then our gas production thanks to the optimisation of existing facilities and complying with the strictest time-to-market". He said the Indonesian domestic market is growing fast and Eni that would continue to support it.
The Merakes development project is a successful outcome of the Eni near field exploration and appraisal strategy, which allows Eni to make the most of nearby infrastructure, including the Jangkrik field which started up in May 2017. Lower costs and shorter time to market will result from this, it said.
This development will also strengthen Eni’s technological and operations leadership in the development of deep-water gas fields in Indonesia.
Eni is the operator with 85% and state PT Pertamina holds the rest. Eni's production is in the Kutei Basin, East Kalimantan, mainly through the Jangkrik field, in the Muara Bakau working area, that delivers production in excess of 650mn ft³/day.