KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) will roll out its entire enhanced oil recovery (EOR) programme in phases over the next decade to revive flagging production from mature and depleting oil wells, said a director of the national oil company.
The company expected to spend some RM1.1bil in research and development for EOR over the next three to four years, as a substantial number of the current producing oilfields have EOR potential, Datuk Mohamad Idris Mansor told delegates in his speech at the opening of the Malaysia Oil & Gas Services Exhibition and Conference 2014.
More than 10 projects were at various stages of development currently, with the first application of EOR technology now ongoing at the Tapis oilfield, offshore Terengganu.
The large-scale EOR project, developed at a cost of about RM10bil, could boost oil production from Tapis by up to 35,000 barrels per day (bpd) from the present 3,000 to 4,000 bpd, and was targeted to increase the economic value of the field as well as extend its life by more than 25 years, he added.
However, he cautioned that EOR was “fraught with risks”, requiring both heavy investments and advanced technology.
“Petronas, through its E&P Technology Centre, has allocated substantial resources, manpower and finance to conduct research and develop innovative and applicable technologies to rejuvenate and enhance production of these fields,” Mohamad Idris explained.
The national oil company in 2011 had also introduced the risk-sharing contract (RSC) model to spur development of marginal fields and complement its EOR efforts.
“The RSCs give exposure to domestic contractors to enhance their capabilities and capacities, not only as efficient and cost-effective service providers, but also as (oil and gas) reserves holders and E&P operators,” said Mohamad Idris.
Petronas has to-date awarded six RSCs to a number of local-foreign joint ventures, three of which, namely, the Berantai, Balai and Kapal Banang Meranti clusters, are now producing.
Three others – Tanjung Baram, Tembikai Chenang and Ophir – are under development.
“We need to recognise that our petroleum assets are finite and depleting. After about 40 years of extensive exploration, development and production, our petroleum resources are now entering into a ‘mature phase’.
“We are now faced with potential reduction in producible reserves and a further decline in crude oil and gas production. As custodian of the country’s hydrocarbon resources, Petronas is well aware of the challenges to extend the lifecycle, arrest the decline and enhance the production of existing fields,” Mohamad Idris said.
The oil, gas and energy sector contributes about 30% to Malaysia’s gross domestic product and 40% of its revenue.
As of January 2013, Malaysia held some 22.2 billion barrels of oil equivalent of oil and gas reserves, and the third largest gas reserves in the Asia-Pacific, behind China and Indonesia.
It is the world’s No. 2 exporter of liquefied natural gas (LNG) after Qatar.
Mohamad Idris said that by 2016, Petronas would have the capacity to produce 29.3 million tonnes per annum (mtpa) of LNG from 25 mtpa currently.
Malaysia produces about 1.1 million barrels of oil equivalent of natural gas and 600,000 barrels of oil per day.
“By 2020, the country is expected to have a more diversified oil and gas sector, building upon our competitive advantages and our ability to increase the aggregate production capacity by 3% to 4% per year.
“And we should be able to meet domestic growth demand while sustaining crude oil and LNG exports to world markets,” Mohamad Idris said.