Sulawesi html
Kalimantan
Timor Sea Joint Petroleum Development Area GPDA
Indonesia BP Migas approves Cepu Block plan 2006  Northeastern East Kalimantan. Indonesia Bengara (II) Block
Bangkudulis Oil Field Development Project onshore East Kalimantan Indonesia
Bengara-II Block Property
China Wisdom International (HK) Ltd., Hong Kong, terminated 2003 (OGJ Online, Mar. 28, 2003).
Continental submits plan to develop Bangkudulis oil field on northeast Kalimantan
The Bangkudulis property contains a shut-in oil and gas production well but it is not producing.
Northeastern East Kalimantan Indonesia 1999-2003


The blue outline of the USA is superimposed for scale to illustrate  how big Indonesia is.


SULAWESI

Sulawesi CENTRAL

Earthquake Central Sulawesi, Indonesia
May 05, 2000
An earthquake measuring 6.5 on the Richter scale jolted Banggai island in Indonesia's Central Sulawesi on Thursday noon, bringing disorder to hundreds of houses. According to the Antara News Agency, the quake occurred at 12:21 local time (04:21 GMT).
Antara quoted Geophysics and Meteorology Body in Makassar, capital of South Sulawesi, as saying that the epicenter of the quake was located 33 kilometers under the sea level in Peleng Strait, about 94 kilometers southeast of Luwuk city in the eastern part of the province. There were no immediate reports of casualties or damages.
This was the second earthquake in the area in the past one year.
An earthquake measuring 6 on the Richter scale jolted Peleng Strait on August 13 last year.



Timor Sea Joint Petroleum Development Area GPDA
Offshore  www.offshore-mag.com 

Timor-Leste's Prime Minister Mari Alkatiri assured global oil and gas investors in mid-November of his government's competitive and transparent legal and contractual regime for developing resources in the Timor Sea.  Welcoming more than 70 executives to a two-day workshop on the country's first round of bidding for concessions, he pledged a high standard of professionalism and dedication to companies participating in the bidding round.

The bidding round area is under Timor·Leste's exclusive jurisdiction and is distinct from the area of overlapping claims of the Greater Sunrise field development that has been the subject of talks between Timor-Leste and Australia.  "Our willingness to engage in good faith negotiations to resolve this dispute is a mark of the commitment and determination of my government to develop this nation. I can inform you today that I believe this process can be concluded in one to two months," he said.

The field lies just 150 km from the Timor-Leste coastline compared with almost 300 km from Australia.  The Joint Petroleum Development Area GPDA) comes under a parallel regime that was developed with the Australian government.  The government opened bidding in September on 11 blocks in Timor-Leste's exclusive maritime area. The government will announce the successful bids in mid-June.

The Timor Sea Designated Authority has also opened bidding on four blocks in the JPDA. 

 Anzon Australia Ltd. began production from the Basker field in offshore Gippsland basin, Victoria. 
The Basker-2 well was opened up Nov. 14 and soon was flowing oil to surface via a subsea completion and 1.9 km flow line to the FPSO, Crystal Ocean.  The initial flow rate from the upper interval of a completion optionally capable of producing from either one or two intervals was established at 9,500 bid of oil with no water production and was accompanied by approximately 10 MMcfl d of solution gas.  The inlet choke pressure on the FPSO was 1,400 psig.  This development is in 155 m water depth, 75 km offshore in the Bass Strait, and involves the first FPSO in the Gippsland basin.  The participants in the BMG Joint Venture are Anzon Australia Ltd. 62.5% (operator) and Beach Petroleum Ltd 37.5%


Kalimantan
Northeastern East Kalimantan. Indonesia Bengara (II) Block
Bangkudulis Oil Field Development Project onshore East Kalimantan Indonesia
Bengara-II Block Property
China Wisdom International (HK) Ltd., Hong Kong, terminated 2003 (OGJ Online, Mar. 28, 2003).

Continental submits plan to develop Bangkudulis oil field on northeast Kalimantan
The Bangkudulis property contains a shut-in oil and gas production well but it is not producing.

Northeastern East Kalimantan Indonesia 1999-2003
Indonesia BP Migas approves Cepu Block plan
Eric Watkins Senior Correspondent LOS ANGELES, June 06, 2006

 Indonesia's upstream oil and gas regulatory body BP Migas has approved the working plan proposed by ExxonMobil Corp. and state-run PT Pertamina for development of the offshore Cepu Block.

ExxonMobil and Pertamina are soon expected to open drilling tenders starting with 37 wells in Banyu Urip oil field, believed to be the largest on the block.

In April 2001, ExxonMobil said that Mobil Cepu Ltd., an affiliated company, had a major oil discovery at the Banyu Urip No. 3 (BU-3) well. It said with estimated reserves of more than 250 million bbl, the BU-3 well is one of the most significant oil discoveries in Indonesia in the past decade (OGJ Online, Apr. 12, 2001).

In March, Pertamina Pres. Ari Soemarno said Pertamina would sign an agreement with ExxonMobil Indonesia for operation of the block (OGJ Online, Mar. 13, 2006).

Pertamina and ExxonMobil each have a 45% share of the Cepu project with the remaining 10% held by the Central Java and East Java administrations.
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Indonesia  Bengara II block
By OGJ editors HOUSTON, May 4
Continental Energy Corp., Dallas, staked three onshore exploratory wells on the Bengara II block production-sharing contract in the Tarakan basin of East Kalimantan after the government approved its planned 2004-05 program.

Pungit 1 is projected to 8,800 ft at a cost of $4.5 million. It is on the Galiadap anticline near an oil lake formed by seeps and leaks from wellheads from an oilfield active around 1915. The well will test four potential oil-producing zones.
Seberaba 1 is projected to 12,511 ft at a cost of $6.2 million to test three separate zones on the end of a large seismically determined trap formed by a rollover into a large regional fault.
Apung 1 is to go to 7,595 ft at a cost of $4.4 million. It will test part of a large stratigraphic wedge evident on seismic.

Continental's 60% owned Indonesian operating unit, Continental-GeoPetro (Bengara-II) Ltd., will supervise drilling operations.

A farmout under which China Wisdom International (HK) Ltd., Hong Kong, was to have drilled on the block was terminated in late 2003 (OGJ Online, Mar. 28, 2003).

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Northeastern East Kalimantan Indonesia 1999-2003
By OGJ editors HOUSTON, Mar. 28 2003

Several independents plan to drill on the 900,000-acre Bengara (II) Block in the Bulungan River Delta in the Tarakan basin of northeastern East Kalimantan. The drilling group includes GeoPetro Resources Co., San Francisco, and its Jakarta subsidiary, APEX (Bengara-II) Ltd., the operator, along with farmee China Wisdom International (HK) Ltd., Hong Kong. 

 China Wisdom will drill five obligation wells to test five exploration plays by the end of 2004.  Two land wells will cost $4 million each and three wells in 10-30 ft of water in the Bulungan River $6 million each. 
 If C ina Wisdom finds a company to build a 100 Mw power station and secures a gas sales contract, GeoPetro and partners will drill at least three wells to develop a gas field discovered in 1988 by the Muara Makapan-1 well. That well flowed 19.5 MMcfd of gas and 640 b/d of condensate. TD is 10,800 ft.

Bangkudulis field lays mostly onshore Bangkudulis Island in the Sesayap River estuary and Tarakan basin of East Kalimantan.

Oil & Gas Journal September 4, 2000
Indonesia Equatorial Energy Inc., Calgary, plans to acquire a 3D seismic survey and drill 6 wells in second half 2000 in Sembakung field in the Tarakan basin of Northeast Kalimantan.  Equatorial drilled three wells in the field in first half 2000, hiking production to more than 4,000 b/d of 37° gravity sweet crude. SBK-15, the first drilled in the field in 19 years, stabilized early this year flowing 2,400 b/d of oil from 3,222-62 ft and cut 256 ft of potential pay.  The company operates the field under a technical assistance contract with Pertamina. Production infrastructure can handle more than 10,000 b/d.

Oil & Gas Journal, December 15, 1997
On the Eurasian plate, younger Oligocene-aged oil-prone coals are important source rocks in South Sumatra and NW Java, associated with up to 20 billion BOE in place. Neogene coals are reported as the dominant source in the Kutei and Tarakan deltaic systems of Borneo (25 billion BOE).

Oil & Gas Journal, March 10, 1997 
Canadian Occidental Petroleum Ltd., Calgary, acquired a 47.5% interest in the oil and gas production contract covering the 240,000-acre Karang Besar block, as well as a 10% interest in the 1.66-million acre Maratua block in the Tarakan basin along the northeastern coast of Kalimantan. 

Oil & Gas Journal March 29, 1999
Two Canadian companies are preparing to start up operations in the Tarakan basin, Northeast Kalimantan.
Equatorial Energy Inc., Calgary, and Pertamina plan to start $13.5 million of work in May in Sembakung oil field. The work consists of lease road rehabilitation, reworking several of the 17 producing wells, and starting in October 1999 drilling as many as six new wells. The field, discovered in 1976, produces a stabilized 2,900 b/d from about 8,000 ft.

Muara Makapan # 1 well.pdf
2o 58' 34.30.8" N  117o 35' 50.258"
17 MMcfgpd  1988

EXPLORATION AND PRODUCTION
Oil was first discovered on Tarakan Island in 1899 and exploration has continued to the present day. In 1967 Pertamina awarded the first PSC contract in offshore Tarakan to Japex. Between 1973 and 1976 the Mengatal, South Pamusian and Selatan fields were discovered by Tesoro. The last field discovered was Mamburungan in 1986. ARCO acquired the onshore Sembakung PSC in 1974 and had three significant discoveries: Sembakung and Bangkudulis oil fields and gas at Sesayap. A portion of the Sembakung PSC is presently held by Pertamina-Teikoku who have drilled four wells in the area. The Bunyu Tapa gas field on Bunyu Island was discovered by Pertamina in 1975. This led to the construction of a methanol plant to utilize the gas. Bunyu Nibung and Barat Fields were discovered in 1974 and 1979 respectively and are essentially satellite fields of the Bunyu Field.
In 1985 a new offshore PSC was awarded to a consortium with Sceptre as operator. After the drilling of five wells, four of which contained subcommercial quantities of hydrocarbons, the PSC was relinquished in 1993. So far, only one well has been drilled in a down dip position, the Vanda-1, in 348 m of water in a distal position of the central part of the offshore. Petrocorp's Maratua and Karang Besar PSCs were awarded in 1990 covering the on- and offshore Berau and Muara sub-basins, south of Sceptre's Bunyu PSC. These two blocks were subsequently awarded to Maersk in 1995. Shell's Sebawang PSC was awarded in 1995 covering the offshore Tarakan Sub-basin.
Exploration in the Tarakan Basin has resulted so far in the discovery of 14 oil and gas fields. Cumulative production from these fields is approximately 320 MMBO in a basin of 7,000 km², with ultimate recovery from the proven fields estimated at 500 MMBO. Total gas produced to date from 13 wells has been 81 BCGF. Nearly 86% of the oil production to date has come from two fields: the Pamusian Field on Tarakan Island and Bunyu Field on Bunyu Island. Most of the remaining production comes from a series of very small fields located in individual fault blocks on Tarakan and Bunyu Islands. http://www.geocities.com/CapeCanaveral/Campus/9349/hd-tarakan01/ipa1996_proceedings.htm



Bengara-II Block Property

Concession Type:       Production Sharing Contract - Standard Terms
Size & Location:         903,000 acres, Onshore E. Kalimantan, Indonesia
Concession Term:      Up to Max 30-years from December 4, 1997
Production Share:       After Government Take: Oil: 26.7%  Gas: 62.5%
Expectations:             Exploration Stage Property: Oil, Condensate & Gas

Participation:              Continental Owns Net 60% Share of Property
CONTINENTAL ENERGY CORPORATION
Suite 1760, One Bentall Centre, 505 Burrard Street
Vancouver, B.C. CANADA V7X 1M6

Reserves (mmbo):      None proved. None in production.
Possible Resource:     As much as 2.5 Billion barrels of oil & oil equivalent..
Project Operator:        Continental’s 60% owned subsidiary Apex

(Bengara-II) Ltd. operates and manages the Bengara-II property from its Jakarta offices.

Regional Setting:
More than 310 million barrels of oil and 97 billion cubic feet of gas have been produced from 349 wells in 15 fields since 1889 within the prolific Tarakan Basin area surrounding Bengara-II.
Gas Discovery:
The Muara Makapan-#1 well was drilled by former concession holder in 1988  and the well tested 19.5 MMCF per day of sweet, wet gas and 602 barrels per day of condensate from a 39’ net pay sandstone at a depth of 6,200’.

Old Oil Field:
Continental’s field geologists have located 4 old Dutch wells on the Bengara-II Block. The wells are from an old oil field now abandoned but operated circa 1915. The old field lies over one the larger drilling prospects in the block and is compelling justification to drill. Several drilling prospects have been identified in the vicinity of the old oil field.
Prospectivity:
Bengara-II is a world class exploration property with very high potential. Exploration work to date indicates a good potential for numerous petroleum accumulations in the Bengara-II Block of the order of 50 to 200 million barrels reserves size and probably some larger.  Source rocks indicate an almost 50/50 propensity for oil and wet (LPG rich) gas. It is estimated the Block also contains the potential for multiple gas fields each in the 300 Billion to 1.2 TCF resource range.
Current Situation:
Seeking farm in partners and raising funds to pay for our 60% share of costs to drill 3 exploratory wells in late 2003. To date our exploration and prospect generation efforts have identified approximately 25 drillable prospects within the Bengara-II Block. Drilling in 2003 is expected to begin with the Pungit-#1 Well on our Galiadap Anticline play to test a large basement involved four way dip closure underlying the old oilfield with estimated resource potential of 120 million barrels of oil equivalent.

Continental Energy Corporation
Apex (Bengara-II) Ltd.
Bengara-II Block Executive Summary

The Bengara-II Block is an oil and gas exploration concession located mostly onshore but partially offshore astride the Bulungan River Delta in the Indonesian province of East Kalimantan on the northeast coast of the island of Borneo.
It covers a single contiguous area occupying 4,867 square kilometers or 1.2 million acres.

Apex (Bengara-II) Ltd. ("Apex"), a 60% majority owned subsidiary of Continental is the sole party to, and 100% owner of rights to, a standard terms Production Sharing Contract (PSC) with Pertamina, the state oil company of Indonesia, signed on 4-December-1997. The PSC provides Apex with oil and gas exploration and production rights to the Bengara-II Block in return for Apex's commitment to expend a minimum of US$ 7 million on exploration of the Block during the first three years of the PSC contract term.

Geologically the Bengara-II Block lies in the Tarakan Basin near major oilfields at Tarakan and Bunyu. More than 120 million barrels of oil and 96 billion cubic feet of gas have been produced from the Tarakan Basin from 349 wells in 15 recognized fields. Over 7,000 meters of highly prospective deltaic sediments are expected to exist in the eastern portion of the Block and the presence of high quality reservoir sands in close juxtaposition to organically rich and thermally mature source rocks is well documented. Sedimentary conditions for the generation and preservation of hydrocarbons in the Bengara-II Block are ideal throughout the entire expected stratigraphic section.

Nearly 2,200 line kilometers of 2 D seismic data available within the Bengara-II Block are entirely adequate for reconnaissance interpretation purposes. Some localized areas may benefit from reprocessing. New seismic is required in places where no reconnaissance grid exists and for prospect confirmation in other localities. Cost effective field geology surveys are expected to confirm initial drilling targets without the need for additional seismic until after a first discovery is made.

Since 1938, only two wells have been drilled in the Bengara-II Block. One of these is a substantial gas discovery. The Muara Makapan-#1 was drilled in 1988 by Deminex from a swamp barge positioned on one of the Bulungan River Delta distributary mouth channels. It reached a total depth of 3,300 meters with i n the Naintupo Formation The well was plugged and abandoned as a gas discovery. It tested 19.5 million cubic feet of gas per day together with 602 barrels of condensate per day from 12 meters of deltaic sandstones of the Pliocene lower Tarakan Formation at a depth of 1,900 meters. Teikoku's Tanjung Sepikat-#1 in 1991 encountered shows but tested water.

A striking feature of the Block is the presence of a 1-hectare "Lake of Oil". In 1998 an Apex field geology team located the oil lake and at least four steel well casings, believed to be from a circa 1915 "Galiadap Field" oil production operation, still actively leaking oil and water and feeding the "Oil Lake". Apex has seismically located a potentially huge oil Play underlying the oil lakes and ex pects its first drilling to be in this area.

Apex has identified 16 separate and unique "Plays" within the Bengara-II Block as well as 36 "Prospects" and over 350 seismically identified "Leads", many associated with seismic character anomalies and direct hydrocarbon indications. The sheer number of unique, identified and conceptualized "Plays" in this Block is unusually impressive by any standards. Some well defined Prospects present immediate drilling targets. Leads almost too numerous to mention offer huge petroleum potential once productive Plays are confirmed.

The two keys to successful prospecting in the Bengara-II Block will focus on identifying traps and understanding sand distribution. Presence of source, maturity, seals and reservoirs is proven. Commonly within deltaic provinces, most petroleum will be found in stratigraphically trapped accumulations and particularly where structural and stratigraphically traps coincide. Such traps are subtle and not easy to identify on seismic. However, the diligent explorer is compensated by the fact that such traps actually do occur frequently in deltaic situations.

Exploration within the Block is in its formative stages and it is premature to make meaningful resource estimates. However, at this point the existing exploration work to date indicates a good potential that there are numerous petroleum accumulations in the Bengara-II Block of the order of 50 to 200 million barrels reserves size and probably some larger. Source rocks indicate an almost 50/50 propensity for oil and wet gas so it can be inferred that the Block also contains the potential for numerous gas fields in the 300 Billion to 1.2 Trillion cubic feet range.

Bangkudulis Block Property

Concession Type:    Technical Assistance
ContractSize & Location:    4,600 acres,
Onshore East Kalimantan, Indonesia
Concession Term:    Up to Max 20-years from October 7, 1996
Production Share:    After Government Take: Oil: 26.7%  Gas: 62.5%
Purpose:        Development of Bangkudulis Oil Field
Participation:    Continental Owns Net 70% Share of Property
Production Level:    Currently Zero, field under developmentReserves (mmbo):    2.8 proved developed non-producing        8.5 probable
Crude Oil Quality:    41 API Degrees Sweet
 Regional Setting:      More than 310 million barrels of oil and  97 billion cubic feet of gas have been produced from 349 wells in 15 fields since 1889 within the prolific Tarakan Basin area surrounding the Bangkudulis Property.
Field Discovery:
The Bangkudulis Field was originally discovered by Arco in 1980 at Bangkudulis-#1 well which tested an accumulated 6,400 BOPD from 4 sandstone intervals of 119’ net pay thickness at a depth of 3,250’ plus 4.5 MMCFD of natural gas from a fifth 60‘ thick sand zone at 4,500’ depth.
Project Operator:
Continental’s 70% owned affiliate GAT Bangkudulis Petroleum Company Ltd. (“GATB”) operates and manages the property from its Jakarta offices.Production

History:
During a 4-year period ending 1989 the Bangkudulis Field discovery well #1 was placed on production at a beginning rate of 1,200 BOPD and an ending rate of 150 BOPD when mechanical problems forced the well to be shut-in. Accumulated oil production was 562,000 barrels. Since 1989 the field was shut in until GATB acquired TAC rights to restore the field to production and complete its full development.
Production Plans:
Production from the field will be delivered by existing pipeline to an existing barge loading facility where it will be pumped to barges for delivery to market at a Pertamina oil terminal a short 8-hour barge journey away on Bunyu Island as can be seen on the map below. We expect to place the field back on production at a rate of about 1,200 BOPD in 2003 and given a slow paced development from available cash flow proceeds we expect field production to peak at as much as 9,000 BOPD.
Current Situation:
Seeking farm in partners and raising funds. In second half 2003 Continental intends to drill two new production wells and workover one existing production well and restore commercial oil production from the field. Production from the 3 wells should commence by end  2003. Full field exploitation is expected to take an additional 18 months and involve drilling 16 to 20 additional wells paid for from production.


Total Indonesia Mahakam program 
Oil & Gas Journal October 16, 2000   
Peciko start-up

Completion of Phase 1 of the giant Peciko gas field development off Indonesia's East Kalimantan is a major milestone in the long history of Total Indonesia.

The company, the Indonesian upstream unit of Franco-Belgian supermajor TotalFinaElf SA, contends the project is the first of its kind to develop an infrastructure for a large-scale, integrated field development project that covers the production chain from wellhead to processing units and then to an LNG plant. 

Mahakam PSC history  Peciko development warranted an eighth liquefaction train at Indonesia's giant Bontang LNG complex. The eighth train came on stream in November 1999, 1 month before Peciko start-up, to supply new LNG contracts with Japan, South Korea, and Taiwan that extend to 2010.
At the same time, Total Indonesia, after being Indonesia's second largest oil producer, has now become its largest gas producer. 
From Bekapai gas field start-up in 1974 to Peciko start-up this year, it is the Mahakam production sharing contract area off the Mahakam River delta area (which Total Indonesia owns 50-50 with Japan's Inpex Ltd.) that is the source of this prolific supply.       Click to enlarge image 

About 1 billion bbl of oil and condensate and over 4 tcf of natural gas have been produced in environments that vary from swampy terrain at Handil and Tambora fields; to shallow waters at Tunu; to moderate-depth waters in the Bekapai, Sisi, and Nubi areas; and to deeper waters at Peciko.    Discovered in 1991-after Tunu gas field, which is now in Phase 7 of production and gearing up for Phase 8-the Peciko project was launched in 1996 to boost Total Indonesia's gas production capacity to meet new LNG contracts. It differs from Tunu in that it is being developed offshore in 30-50 m of water. The field lies 60 km northeast of the city of Balikpapan and southwest of Bekapai in the Makassar Straits.    Peciko details Click to enlarge image 

Of all the producing fields in the Mahakam River delta, the Peciko field is unique in that gas trapping is both structural and stratigraphic. The reservoir section consists of a series of very fine to medium-grained sands scattered throughout deposits of shale and siltstone, and the main productive sequence lies at a depth of 2,100-3,000 m.

Well productivity is very high, averaging 80 MMcfd. Field development initially involved two offshore platforms from which 16 wells were drilled. Full development will entail ultimately about a dozen unmanned platforms

Gas and condensate are shipped via pipeline to the onshore Senipah Peciko Process Area (PPA), integrated with and located just south of the Senipah oil and export terminal that has operated since 1977. After processing, the gas is sent through a 42-in., 86-km gas pipeline to the Bontang LNG plant. The condensate is separated and stabilized and sent via tanker to the Senipah terminal from where it is shipped in the same way as is the crude oil from Handil and Bekapai.

Phase I of Peciko is planned to produce a maximum of 800 MMcfd of gas and 16,000 b/d of condensate.

A further development stage, to be completed by yearend 2001, will involve installing a third offshore wellhead platform and drilling nine additional development wells to increase production to 1 bcfd. This production level will be maintained over the next 2 years.
 It will then be gradually increased to as much as 1.3 bcfd by 2004, with an average rate of 900 MMcfd. This will require additional platforms, the drilling of new wells, and additional production facilities. This third phase is currently being refined for project approval by yearend 2000.
Beyond Phase 3, the development scheme will bring to about 80 the total number of wells drilled over a period spanning 15 years at a cost of some $1.4 billion in surface facilities and development wells.

Mahakam PSC operating costs have been brought down since 1992 from $2/boe to a little over $1/boe in 2000. By 2004-05, they will be down to $1/boe of which 85% represents technical costs and the balance for administration and overhead. There is a severe cost-cutting program under way throughout the contract area.    This takes into account not only the synergies to be drawn within each field but also the cross synergies from all fields, whether oil or gas. This also allows for a more rational distribution of the local personnel trained by Total Indonesia.
 Production outlook     Click to enlarge image   With Peciko, production from gas fields operated by Total Indonesia will rise from 2.15 bcfd in 2000 to 2.6 bcfd between 2004 and 2010.       Click enlarge image 

The bulk of this supply is intended for the Bontang LNG plant, which is owned 10% by Total Indonesia, now its largest supplier; 55% by Indonesia's state oil company Pertamina; and the balance by two other East Kalimantan operators, Virginia Indonesia Co. and Unocal Corp.       Click here to enlarge image 

The Makaham PSC is Indonesia's most prolific hydrocarbon area. Overall initial hydrocarbon reserves are estimated at 5.7 billion boe (proved) and 6.95 billion boe (proven plus probable).       Click to enlarge image 

Last year, the Mahakam PSC produced 130,000 boe/d, of which 84% was natural gas. Oil production from Bekapai and Handil oil fields peaked at 230,000 b/d in the late 1970s and is now in decline, currently averaging only 23,000 b/d.

 Sophisticated measures at Mahakam oil fields involving gas lift, water and gas injection, recompletions, and stimulations have managed to bring recovery factors to around 45%. A new stage of tertiary enhanced oil recovery EOR was to get under way this year in five reservoirs in Handil field, involving dry gas from Peciko injected in already waterflooded reservoirs. In addition, a $20 million air injection pilot was to begin testing last July in one of Handil's reservoirs, a first in Indonesia. If successful, the process will be extended to other reservoirs. Click to enlarge image 

Proven and probable gas reserves in the Mahakam area, on the other hand, are estimated as high as 31 tcf, accounting for 40% of Indonesia's reserves. So far, only 16 tcf has been sold within existing LNG contracts. Japan accounts for 60% of Bontang contract volumes, South Korea and Taiwan the rest.
Gas is also delivered to methanol, urea, and ammonia plants near Bontang.

LNG market prospects
With its capacity to supply further clients, Total Indonesia is mulling construction of a ninth LNG train at Bontang, which would cost $700 million and produce another 3 million tonnes/year of LNG, mainly from its own gas production. The project, which would take Bontang's LNG capacity to 25 million tonnes/year, can get off the ground only if and when a new large client is found.

While this was easy before the Asian crisis and before other LNG projects targeting the Far East had materialized, times have changed; it is now a buyer's market. Indonesia's LNG success could, in effect, be its undoing: It provides half of Japan's and South Korea's LNG; both countries now wish to diversify their supply sources and have a large choice: Malaysia, Brunei, Australia, and even the Middle East.

Marketing its uncommitted gas is one of the challenges facing the company.
Christophe de Margerie, vice-president of exploration and production of TotalFinaElf, does not discount Japan, South Korea, and especially Taiwan renewing their contracts when they expire within the next 10 years. Meanwhile, he is eyeing the Chinese market, where the firm is in line, as are other oil majors, to build an import terminal for LNG.
India is also a possible future buyer; Total already has a stake in a future LNG terminal project there.

But while the Mahakam PSC is one of TotalFinaElf's "core assets"-accounting for 25% of the company's global production in 1999-it is also, together with the North Sea, a critical source of its cash flow. Asia, as a whole, with 7% of the world's gas reserves, is central to its gas strategy. These reserves, pointed out de Margerie, have been steadily growing: during 1988-99 the firm's gas reserves grew by 32%, essentially concentrated in Malaysia, Indonesia, and Australia (placing them close to large markets).
TotalFinaElf is the fourth biggest hydrocarbon producer in Asia after ExxonMobil Corp., Royal Dutch/Shell, and Chevron Corp., with an investment budget this year of 8 billion euros, two thirds of which is for the upstream.

Exploration, Asia strategy     Click to enlarge image 

In Indonesia TotalFinaElf continues to pursue its exploration effort, with an emphasis on gas in a country where both domestic and export demand for gas is on the rise. In addition to the Mahakam PSC, TotalFinaElf is exploring six other acreages: Tengah, as operator with a 22.5% stake; Walo, with 100%, where 3D seismic is being interpreted; Sabo, 30%, with operator Japan Petroleum Exploration Co. Ltd. 60%; North Sokang, 100%, where a wildcat will be drilled this year; Saliki, operator with 50%; and Sebawang, operator with 50%.

Elsewhere in Asia, the group has production in Thailand and Myanmar since early 1990. Through the former Total SA's merger with Elf Aquitaine SA, it now holds a gas field in Brunei, off Maharaja, which came on stream early last year. Through its earlier merger with Petrofina SA, it also holds 3 exploration blocks in Viet Nam and deepwater acreage off Pakistan. All told, TotalFinaElf operates 420,000 boe/d of Asia production, of which 20% is oil and 80% gas. Christophe de Margerie believes it is important TotalFinaElf  maintain its strong positions in Asia and not let new entrants such as BP overtake it in this market.
"Thankfully," he noted, "the Asian crisis has slowed down some competing projects, such as Exxon[Mobil]'s Natuna project in Indonesia." 

Northeastern East Kalimantan. Indonesia
By OGJ editors  HOUSTON, Mar. 28 2003

Several independents plan to drill on the 900,000-acre Bengara (II) Block in the Bulungan River Delta in the Tarakan basin of northeastern East Kalimantan.
The drilling group includes GeoPetro Resources Co., San Francisco, and its Jakarta subsidiary, APEX (Bengara-II) Ltd., the operator, along with farmee China Wisdom  International (HK) Ltd., Hong Kong. 
China Wisdom will drill five obligation wells to test five exploration plays by the end of 2004.  Two land wells will cost $4 million each and three wells in 10-30 ft of water in the Bulungan River $6 million each. 
If China Wisdom finds a company to build a 100 Mw power station and secures a gas sales contract, GeoPetro and partners will drill at least 3 wells to develop a gas field discovered in 1988 by the Muara Makapan-1 well. That well flowed 19.5 MMcfd of gas and 640 b/d of condensate. TD is 10,800 ft.

December 4, 2003
Farm Out Terminated

Langley, BC, Canada: DECEMBER 4, 2003 CONTINENTAL ENERGY CORPORATION ('Continental', OTC-BB: CPPXF) announced that together with other shareholders it has terminated a March 3, 2003 farm out agreement with China Wisdom International (HK) Ltd. ('China Wisdom') in accordance with the termination provisions of that agreement. The farm out agreement involved the Company's Bengara-II Block exploration property in East Kalimantan, Indonesia. The farm out was terminated due to China Wisdom's failure to perform drilling obligations under the agreement. Approximately US$ 630,000 cash already advanced by China Wisdom to the company's Continental-Wisdom-GeoPetro (Bengara-II) Ltd. operating unit is forfeited by China Wisdom with the termination.

In accordance with the termination provisions of the farm out agreement, from December 1, 2003 Continental's share of the Bengara-II Block property shall be restored to 60% and the share of its partner in the Bengara-II Block, GeoPetro Resources Company of San Francisco shall be restored to 40%.

Continental Energy Corporation is a small exploration company with world class properties focusing its efforts on discovering major reserves in Indonesia. Continental owns interests in three oil and gas concessions covering 3 million acres in Indonesia, the Bengara-II Block and the Bangkudulis Block and the Yapen Block.

Bangkudulis field lies mostly onshore Bangkudulis Island in the Sesayap River estuary and Tarakan basin of East Kalimantan.

Oil & Gas Journal September 4, 2000
Indonesia Equatorial Energy Inc., Calgary, plans to acquire a 3D seismic survey and drill 6 wells in second half 2000 in Sembakung field in the Tarakan basin of Northeast Kalimantan. Equatorial drilled 3 wells in the field in first half 2000, hiking production to more than 4,000 b/d of 37° gravity sweet crude. SBK-15, the first drilled in the field in 19 years, stabilized early this year flowing 2,400 b/d of oil from 3,222-62 ft and cut 256 ft of potential pay.  The company operates the field under a technical assistance contract with Pertamina. Production infrastructure can handle more than 10,000 b/d.

Oil & Gas Journal, December 15, 1997
On the Eurasian plate, younger Oligocene-aged oil-prone coals are important source rocks in South Sumatra and NW Java, associated with up to 20 billion BOE in place. Neogene coals are reported as the dominant source in the Kutei and Tarakan deltaic systems of Borneo (25 billion BOE).

Oil & Gas Journal, March 10, 1997 
Canadian Occidental Petroleum Ltd., Calgary, acquired a 47.5% interest in the oil and gas production contract covering the 240,000-acre Karang Besar block, as well as a 10% interest in the 1.66-million acre Maratua block in the Tarakan basin along the northeastern coast of Kalimantan. 
Bangkudulis Oil Field Development Project onshore East Kalimantan Indonesia
September 25, 2000 Purchase of Interest in Oil Field Development

Continental Energy Corporation announced today that it has purchased a 70% stake in GAT Bangkudulis Petroleum Company Ltd. and its Bangkudulis Oil Field Development Project onshore East Kalimantan Indonesia. According to an independent engineers report by Chapman Engineering of Calgary the Bangkudulis Field contains proved, developed, non-producing oil reserves of 2,865,000 barrels plus an additional amount of 8,551,000 barrels classified as probable reserves. At the present time the Bangkudulis Field is not producing and one existing production well is shut in. During a four year period ending in 1989 the shut-in well flowed 540,000 barrels of sweet 41º gravity crude. Additional drilling of up to 18 new production wells is required to complete the full field development. Bangkudulis Field lies mostly onshore Bangkudulis Island in the Sesayap River estuary of East Kalimantan, Indonesia. Geologically the field lies in the Tarakan Basin. More than 120 million barrels of oil and 96 billion cubic feet of gas have been produced from the Tarakan Basin from 349 wells in 15 recognized fields. GAT Bangkudulis Petroleum Company Ltd. ('GATB'), a private British Virgin Islands company, is engaged in the development of Bangkudulis Field pursuant to a Technical Assistance Contract (the "TAC") with Pertamina the Indonesian state oil company. The Bangkudulis TAC covers an area of 18.6 square kilometers over the Bangkudulis Field, an oil and gas field originally discovered by Arco in 1980 at the Bangkudulis-#1 well which tested an accumulated 6,500 BOPD from four sand reservoir zones of accumulated 119 feet net thickness plus 4.5 MMCFD from a fifth sand reservoir zone of 60 feet thickness. GATB owns a 100% interest in the TAC and the underlying field development project.

The seller, Dimensions West Energy, Inc., of Vancouver acquired its 70% shareholding of GATB in 1998. GATB acts as field development operator and Continental shall exercise executive management control over GATB through its majority 70% shareholding.The terms of the deal with the seller provide for Continental to 1) pay the seller a non refundable US$ 15,000 cash deposit, 2) agree to permit the seller to recover its entire US$ 3.6 Million investment from actual crude oil production proceeds derived from the Bangkudulis Field as, when and only if such production proceeds become available, 3) agree to assume all of the seller's funding responsibility (approximately US$ 4.4. million) with regard to GATB, the TAC and the field development project retroactive to an effective date of 1-June-2000 and 4) agree to provide the seller a 10% net profits interest in Continental's 70% share of Bangkudulis Field production profits for the life of the field. Continental estimates that it will be required to provide a total of US$ 4.4 Million to meet its obligations to the seller with respect to item 3) above which includes sufficient funding to complete the drilling of two new development wells, work over the existing shut-in production well, fit out the balance of needed production infrastructure and bring the field into commercial production.

Production revenue from these first three wells, when brought on stream, is expected to carry the remaining costs of additional drilling. Successively higher production revenues as new wells are completed and placed on production should fund the full field development cost estimated to be US$ 28 Million. An amount of US$ 3.6 Million has already been invested in the Bangkudulis Field by the seller. Construction of four drill sites, some access roads, a 7-inch pipeline and installation of some production and logistics infrastructure have already been accomplished within the field as a result of this prior investment.Bangkudulis Field production will be produced to a barge along existing surface production facilities and pipelines. Barges will periodically be towed and crude delivered and sold to Pertamina at a sales point on nearby Bunyu Island, a ten-hour barge voyage from the Bangkudulis Field.

Bangkudulis Field crude historically demands a price equivalent to the Indonesian "Minas Crude" grade which approximates the same US$ world market price as Brent crude.The seller and the Company share a common director, Mr. Richard L. McAdoo who is also President of both the seller and the Company. Up until his resignation from the seller's board in January 2000 the Company also shared a second director, Mr. Gary R. Schell with the seller. Neither Mr. McAdoo nor Mr. Schell have or expect to have any personal beneficial interest in the contemplated transaction other than that of being shareholders.Interested parties are referred to a corresponding press release being made simultaneously by the seller, Dimensions West Energy, Inc. CDNX symbol DWM.

There are no finders fees involved with the acquisition nor are shares of either Continental or the seller involved in the transaction.The acquisition is made subject to the approval of the Canadian Venture Exchange.Continental is a small but aggressive oil and gas exploration company focussing its efforts on discovering major reserves in Indonesia. The Company owns and operates two high potential exploration properties under Production Sharing Contracts covering some 3.7 million acres in Indonesia, the onshore Bengara-II Block and the offshore Yapen Block.

ON BEHALF OF THE BOARD OF DIRECTORS OF CONTINENTAL ENERGY CORPORATION
Gary R. Schell, P.Eng
President
Continetal Energy Corporation.
CONTINENTAL ENERGY CORPORATION
Suite 1760, One Bentall Centre, 505 Burrard Street
Vancouver, B.C.
CANADA
V7X 1M6

Tel: (604) 687-3434
Fax: (604) 687-3073

E-Mail: info@continentalenergy.co

August 2005