Petronas operates the Hidayah field in North Madura II with estimated oil reserves of around 88.55 MMSTB.
Heaptalk, Jakarta — Malaysian oil and gas company, Petronas, managed to obtain permission from the Indonesian government to develop the Hidayah field in the North Madura II working area. Petronas Carigali North Madura II discovered oil reserves after drilling three exploratory wells in this area. The last well drilled was Hidayah-1 with estimated oil reserves of around 88.55 million stock tank barrels (MMSTB).
The Minister of Energy and Mineral Resources (ESDM) approved the plan of development I (POD-I) by Petronas Carigali North Madura II through an approval letter dated December 27, 2022, in response to recommendations submitted by Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas).
With the approval of POD-I for the Hidayah field, production facility construction activities can be carried out immediately. The field is expected to start producing oil (onstream) in early 2027 with the current production level at around 8,973 barrels of oil per day (BOPD).
This field will reach peak production in 2033 with a production range of 25,276 BOPD. It is estimated that this field will be actively producing for 15 years from 2027 to 2041. During that period, this field is expected to contribute US$2.1 billion in state revenues, which equals around Rp31 trillion.
The Hidayah field is located about 6 kilometers north of Madura Island, East Java. Several oil and gas fields in this area have already started operating. Head of SKK Migas Dwi Soetjipto said, “This shows that exploration allows the discovery of new fields even in areas where upstream oil and gas activities are already quite dense.”
Oil production is below domestic consumption
SKK Migas encourages the acceleration of POD-I in the Hidayah field to immediately produce oil from the resources discovered. “The completion of the Hidayah field development is expected to increase oil production, which will play a role in reducing oil imports. In the future, surely, the Hidayah field will become an important contributor to achieving the target of 1 million barrels of oil production in 2030,” explained Dwi.
Currently, oil production is still below domestic consumption, thus the government is prioritizing efforts to accelerate oil discovery to be produced. Later, when gas production exceeds domestic demand, the remainder can be exported to increase foreign exchange.
Further, Dwi added, “This sort of investment is proof that Indonesia’s upstream oil and gas industry is still attractive to investors. Afterward, the result will depend on how we work together to create a conducive investment climate.”
The estimated costs required for the development of the Hidayah field consist of investment costs which exclude sunk costs of around US$926 million, operating costs including land and building tax until the field reaches the economic limit of around US$1.99 billion, and abandonment and site restoration (ASR) costs of approximately US$201 million.
“We hope that all stakeholders can provide full support for the development of the Hidayah field to realize the contributions we expect,” concluded Dwi.
