Mako Gas Field, offshore Indonesia

The Mako Gas Field is one of the largest undeveloped gas discoveries in the West Natuna Sea, offshore Indonesia.

The fully appraised field is located within the Duyung Production Sharing Contract (PSC).

Conrad Asia Energy holds 76.5% operated interest in Duyung PSC through its fully-owned subsidiary West Natuna Exploration. Coro Energy (15%) and London based oil and gas explorer Empyrean Energy (8.5%) are the other joint venture partners.

Mako field hosts high quality gas consisting of 98% methane with no heavy metals and mercury, and has a lower carbon footprint.

The Final Investment Decision (FID) on the Mako project was targeted for Q4 2024. However, it was delayed. It may commence production in 2026.

Mako Gas Field Location

Mako field in the Duyung PSC is located in the Riau Islands Province, Indonesian waters in the West Natuna area. It is located approximately 100km to the north of Matak Island and 400km to the northeast of Singapore.

The gas field has an extremely large, shallow structural closure covering more than 350km² area.

The Duyung PSC permit covers more than 1,100km² of area in the West Natuna Basin. The PSC is located in water depths of 60-100m and it is situated nearby the pipeline infrastructure owned by the Indonesian Government.

Background

The initial Plan of Development (PoD) of the Mako Gas Field was submitted to the Indonesian oil and gas regulator SKKMigas in August 2018. The PoD was approved in 2019 by the Indonesian Ministry of Energy and Mineral Resources (MEMR).

Initially, Conrad was the 100% shareholder of Duyung PSC via its subsidiary West Natuna Exploration (WNEL). In April 2017, Empyrean entered into a sale and purchase agreement with Conrad to acquire 10% interest in West Natuna.

In February 2019, Coro Energy signed an agreement to receive 15% interest in Duyung PSC from WNEL.

Additionally, Empyrean received 8.5% interest in the PSC directly.

An updated PoD for the field was announced in September 2022 due to the increase in Contingent Resources after 2019 drilling campaign. The updated plan was approved by the Indonesian Ministry in November 2022.

The Duyung PSC, which was awarded in 2007, will run until 16 January 2037.

Geology and Resources

Mako Field has a very large and shallow structural closure with the reservoir comprising of Pliocene-age sandstone.

The gas-water contact was made at approximately 391m true vertical depth beneath the sea.

The commercial viability of the field was demonstrated by drilling of Mako South-1 well by West Natuna Exploration in June 2017.

The well was drilled to a total depth of 520.29m (1,707 feet). It encountered 23ft of net gas pay of the Upper Intra Muda Sands.

This was followed by appraisal drilling and testing of two wells in 2019 leading to the delineation of the gas field and confirming additional gas resources.

According to a technical report prepared by Gaffney, Cline & Associates, Mako Field contains full field 2C resources of 413 billion cubic feet (Bcf) (100%).

Mako Gas Field Details

According to the updated PoD, Mako will be developed in two phases. Phase 1 will comprise six wells, followed by two additional wells in the second phase.

These wells will be tied back to a leased production platform located at the field. The recovered gas will be then exported via the West Natuna Transportation System pipeline to the Singapore market for sales.

The development will use a Conductor Support Frame (CSF) for one dry wellhead and gas import-export support linking via a bridge to a Mobile Offshore Production Unit (MOPU).

The MOPU will treat gas via jumpers from the wells and will separate gas from produced water. The CSF would be free standing initially but will be tied back to the hull of the MOPU in a W formation via horizontal braces.

Phase 1 capital expenditure is estimated at $251m and the total capital expenditure at $303m.

The PoD estimated that Mako field will have a plateau production of 120 million standard cubic feet per day (mmscf/d) with a gross recoverable 2C contingent resource of 413 Bcf.

Key Contracts

The full multi-discipline Front-End Engineering and Design (FEED) contract for the topside facilities of the Lease of MOPU and CSF was awarded to PT Synergy Engineering, an Indonesian engineering consultant.

In 2019, Gaffney Cline & Associates, an independent wholly owned subsidiary of Baker Hughes, prepared the independent resource audits and assessments for the Mako field.

Agreements

The Mako Joint Venture partners signed a binding Gas Sales Agreement (GSA) with PT Perusahaan Gas Negara (PGN), a subsidiary of Indonesian oil company PT Pertamina (Persoro) in March 2024 for the sale and purchase of the domestic part of gas from the field.

Total contracted volume is up to 122.77 trillion British thermal units (tBtu) of gas with an estimated production rate of 35 billion British thermal units per day (Bbtud).

In August 2024, the joint venture partners signed another binding GSA with Sembcorp Gas, a wholly owned subsidiary of Sembcorp Industries, for the export portion of natural gas from the Mako gas.

The agreement is valid till January 2037 and includes the sale of up to 76.9 million standard cubic feet per day (mmscfd) of gas to Sembcorp.

An additional up to 35Bbtud equivalent to 35.4mmscfd of gas would be sold if a tie-in pipeline is not constructed.