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Kelidang boost for Brunei Darussalam

Unitisation proposals set to spearhead other development projects in sultanate

Upstream activities in Brunei Darussalam are slowly coming back to life after a hiatus due to a territorial waters dispute with neighbour Malaysia and protracted unitisation talks relating to discoveries that straddle the maritime border.

The Sultan of Brunei, Hassanal Bolkiah, is keen for state-owned PetroleumBrunei to work with its Malaysian counterpart Petronas to speed up the exploitation of discoveries located in the Commercial Arrangement Area (CAA) that is jointly administered by the two countries.

First out of the starting gate is expected to be the Kelidang field on Petronas-operated Block CA-2, where several trillion cubic feet of gas lie in water depths of some 2000 metres.

The operator has already approached the market for a leased floating production unit — either a newbuild or conversion — for Kelidang.

It is understood Petronas is open to various floating production concepts although one source claimed a semi-submersible would be the likely development solution.

Production rates of upwards of 450 million cubic feet per day of gas have been touted for the Kelidang Cluster, with volumes being piped to the five-train Brunei liquefied natural gas (BLNG) plant at Lumut.

Enhancement

Petronas has already carried out the feasibility study, concept select enhancement work and pre-front-end engineering and design for the Kelidang Cluster development.

One industry source suggested that the FPU winner could be lined up by 2020 suggesting the final investment decision could be taken next year.

The current partners in Baram Delta Block CA-2 — also home to the Keratau, Kempas and Keratau South West discoveries — are PetroleumBrunei, Petronas, Shell and Murphy Oil.

However, Thailand’s national upstream company PTTEP is understood to be in talks with Murphy to acquire its interests in Brunei, on top of its recent $2 billion-plus purchase of the US independent's Malaysian assets.

Meanwhile, the Brunei National Unitisation Secretariat and Petronas have drawn up unitisation arrangements for the Kinabalu West NAG and Maharaja Lela North fields plus the Gumusut-Kakap and Geronggong-Jagus East fields.

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Both these deals involve several blocks that straddle the maritime boundary between Brunei and Malaysia.

These unitisation negotiations might have taken longer than originally hoped, but once finalised will pave the way for new projects.

Brunei Shell Petroleum’s (BSP) Geronggong oilfield — the deepest and most remote discovery in Brunei waters to date — could be developed as a tie-back to the producing Gumusut-Kakap facilities.

Onshore fields in the sultanate also supply feedstock gas to BNLG. BSP recently boosted production from its Darat field via a new gas processing unit.

Gas from Darat is expected to account for 5% of BLNG’s feedstock in coming years.

BSP, a 50:50 joint venture of the Bruneian government and Anglo-Dutch supermajor Shell, is also continuing to maintain output via development drilling campaigns at mature assets such as the Champion, Champion West and SW Ampa fields.

Bucking trends

There has been little exploration of late in Brunei but Petronas Carigali is about to buck that trend.

Malaysia’s national upstream company is due this month to spud the Kembayau East-1 wildcat. The drilling operation will be supported by Brunei’s Viddacom from the Muara integrated supply base.

New finds and the development of discovered resources, especially in deep water, will be key to the economic future of Brunei and its lucrative LNG industry. The sultanate’s gas production has stagnated at around 1 billion cubic feet per day for the past five years, some 80% of which is exported to Japan.

Most of Brunei’s oil and gas production today comes from mature shallow-water fields in the Baram Delta, so deep-water ventures are needed and without too much delay.

PetroleumBrunei is spreading its international wings.

The company has tied up with South Korea’s Posco Daewoo to jointly pursue business opportunities in the LNG sector.

Under a memorandum of understanding, the companies also agreed to co-operate on the exploration and development of upstream acreage in Brunei and overseas, which could include Posco Daewoo’s Shwe gas field off Myanmar.

PetroleumBrunei also held a 3% interest in the proposed Pacific NorthWest LNG project in Canada that operator Petronas pulled the plug on in 2017.

bb2d0aa49738634dccc07b6231479ae0 Producing: the SW Ampa field off Brunei Photo: OLA M. AARENSTAD
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