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Friday, January 5, 2024

The Tuna Block Super Jumbo gas shares are controlled by Zarubezhneft Rusia


    Indonesia's upstream oil and gas authorities no longer have to worry about replacing ZN Asia Ltd, a subsidiary of Russia's Zarubezhneft (ZN). 

As a subsidiary of the Russian state-owned enterprise Zarubezhneft (ZN) currently holds 50% of the participation shares in the Tuna Block. 

The Tuna Block Super Jumbo gas

    The number of foreign investors' Interest in this work area makes the Indonesian government optimistic that it can spur further development.

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is optimistic that the process of transferring participation shareholders of ZN Asia Ltd. in The Tuna Block could be completed this year. Because of the potential for large amounts of hydrocarbons in it, it can be produced immediately and put into lifting Indonesia.

Blogger Agus Purnomo in SKK Migas

    The development of the Tuna Block faced obstacles after several European Union countries and the UK imposed sanctions on Russia as a result of geopolitical tensions in Ukraine. In the Tuna Block, ZN Asia Ltd. partnered with Premier Oil Tuna BV which is part of the Harbor Energy Group, a British oil and gas company.


    In the Tuna Block, Premier Oil Tuna BV also holds 50% participating shares, as well as being the operator carrying out exploration and exploitation activities of oil and gas reserves.

    Nanang Abdul Manaf, Deputy Head of SKK Migas said that up to now his company has gathered many companies that stated his interest in replacing ZN Asia Ltd. in the Tuna Block. Several companies that have expressed interest are Petroliam Indonesia Berhad Petronas Malaysia and Mubadala Energy.

    The hope is that the process of transferring ZN Asia Ltd's participation shares will be successful. can be decided immediately so that the development of the work area is estimated to be capable Flowing gas up to 150 million standard cubic feet per day (MMscfd) can be done.

    The polemic that occurred in the Tuna Block made the Harbor Energy project that the final Investment Decision (FID) for its development would take place in 2025. In fact, approval for the first Plan of Development (PoD) for the field was given on December 23, 2022. 

    Zarubezhneft (ZN) received assurance of replacing ZN Asia Ltd. Harbor Energy Chief Executive Officer Linda Z. Cook once emphasized that the company's oil and gas portfolio in Indonesia, including the Tuna Block, is still a priority for corporate investment abroad. 

    This commitment was proven by the company by drilling four exploration wells in the Andaman Sea, another oil and gas working area in Indonesia managed by the company.

    The Indonesian oil and gas authority projects a state revenue of IDR 18.4 trillion from the management of the Tuna Block. This figure is higher than the potential The income that Premier Oil Tuna BV can obtain as a cooperation contract contractor is worth IDR 11.4 trillion.

    The Tuna Block is actually one of the Indonesian Government's hopes for increasing Indonesia's natural gas production. Minister of Energy and Resources Minerals (ESDM) Arifin Tasrif said that gas originating from the working area will be exported to Vietnam in 2026.

    Gas exports to Vietnam are considered more profitable because the geographical location of the Tuna Block is closer to Vietnam, making development possible Undersea pipelines such as the Nord Stream gas pipeline can directly distribute gas to mainland Vietnam.

    In terms of investment, the development of the Tuna Block up to the operational stage is estimated to reach US$ 3.07 billion. The estimate includes investments beyond sunk costs of US$1.05 billion, investments related to operating costs up to the economic limit of US$2.02 billion, and abandonment and site restoration costs (ASR) of US$147.59 million.

    Chairman of the Investment Committee of the Association of Oil and Gas Companies, Moshe Rizal, believes that European Union and British sanctions could have a serious impact on plan Tuna Block development. Premier Oil and ZN Asia Ltd. need to immediately take strategic steps so as not to hinder the continuity of its business in Indonesia.

    Moshe said that the government together with SKK Migas must also immediately provide a way out of the deadlock on cooperation commitments. The reason is that the sanctions imposed by the European Union and the UK have the potential to delay the development of the super jumbo oil and gas field.

    The desire to immediately resolve the problems in the Tuna Block also came from the Ministry of Energy and Mineral Resources, which hopes that Premier Oil Tuna BV's partners will be replaced soon.

    Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Tutuka Ariadji, said that data regarding the investment potential and details of the Tuna Block had been opened. Several International companies have expressed interest in investing in the Tuna block, but the government still needs to carry out further studies.

    According to him, the replacement of ZN Asia Ltd. in the Tuna Block is very urgent because Premier Oil cannot continue to invest all of its investment in developing the work area itself. After all, it could disrupt the company's cash flow and could go bankrupt.

    The Tuna Block does have a strategic role because it is located in the North Natuna Sea which directly borders Vietnam, a world geopolitical hot spot. In 2021, it was widely reported that the Chinese government was protesting the Indonesian government over oil and gas drilling activities in the sea of Natuna, even though The Jumbo oil and gas block is still Indonesian territory, and mainland China is too far from the Tuna block.

    In fact, in the Tuna Block, 2D and 3D seismic acquisition activities have been carried out, drilling of four exploration wells, namely the Gajali gas well, North Sea-1 gas well, and Belut Laut-1 gas well in 2011, as well as Sea Horse-1 gas well and Sea Lion-1 gas well in 2014.

    The discovery of hydrocarbon reserves in the Kuda Laut-1 and Sea Lion-1 wells, which are structurally adjacent, was later named the Tuna field, with resources of 104 million barrels of oil equivalent (MMBOE).

    These resources are dominated by natural gas reserves with high condensate content, with a CO2 content of less than 2%. Then, in 2021, potential reserves in the Tuna Block were confirmed again through drilling activities for two Delineation wells Sea Lion (SL)-2 and  Sea Horse (KL)-2.

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