Analysts at IHS Market report that Repsol’s highly anticipated Rencong-1X wildcat in the frontier deep waters of Indonesia’s North Sumatra basin is targeting prospective gas resources of 4 trillion cubic feet (cf).
As reported by Energy Voice, the wildcat, due to be drilled in the second-half 2021, is located in a lightly explored and prospective area of the basin that continues to generate interest and is being keenly watched by regional explorers and global international oil companies (IOCs).
Based on IHS’s modelling assumptions, the minimum economic field size for a discovery at Rencong-1X is about 1.5 trillion cf. It will be drilled in waters over 1,000 meters deep and some 40-45 km form shore.
Significantly, “the well has the potential to be a play opener and, if successful, could result in a number of further prospects being drilled in this region’s deep-water areas,” said Robert Chambers, a specialist in upstream asset valuation in the Asia Pacific region at IHS.
Premier Oil and Mubadala Petroleum are also considering drilling exploration wells in the area.
The “well will be critical for Indonesia, as the State has set ambitious domestic production targets to achieve by 2030. These targets cannot be met purely through the development of discovered undeveloped resources,” added Chambers.
However, “there is limited existing oil and gas infrastructure in Aceh province, with the main facilities of relevance being related to the Arun gas field development and some subsequent smaller projects,” said Chambers.
“There are two main options to commercialise the gas from a potential discovery at Rencong. The first would be to sell the gas into the domestic market through the existing pipeline infrastructure. The second would be to sell the gas as LNG, this would require that the Arun terminal be converted back to an LNG liquefaction and export terminal,” he added.
IHS only considered the domestic gas option in their analysis as the liquefied natural gas (LNG) export option would likely require additional gas reserves from future discoveries in the area.
“The Rencong-1X well is being closely watched as it is a rare frontier exploration well in Indonesia. The potential of the Andaman area has long been discussed and a positive outcome at Rencong-1X could see a spur in activity in the Andaman area, as well as renewed interest and enthusiasm about investment in Indonesia. We are keeping our fingers crossed for a positive result,” said Chambers.
The wildcat was due to be drilled in 2019 but was delayed due to a farm-in process that saw Petronas take a 51% stake in the block. A plan to drill in 2020 was derailed by the COVID pandemic.