The North Sumatra Basin (NSB) is a world-class petroleum province that has been churning out hydrocarbons since the first discovery occurred onshore in 1885.
This was the first significant oil discovery in all of southeast Asia.
From a geographic perspective, the NSB would extend from the Texas-Mexico border around east to New Orleans, and from Houston out to the continental shelf break.
The NSB historically has been an onshore exploration play for the most part. As a result, the offshore is a relatively immature petroleum province with super-giant potential, according to Jakarta-based AAPG member Lawrence D. “Trey” Meckel III.
“The offshore NSB is remarkably under-explored with only 130 offshore exploration wells drilled through 2011, including less than 10 deepwater wells in the prolific Indonesian part of the basin,” Meckel said. “Only four wildcat wells were drilled within the past decade.”
Despite the basin’s onshore exploration history, there’s been little activity in the NSB overall in the past 30 to 40 years, owing principally to political events. Top this off with the horrendous tsunami in 2004 and various earthquakes, and it hasn’t been an attractive area for the weak-at-heart.
It’s only now that the social and political climate has evolved such that exploration in deeper water to search for oil potential has been green-lighted.
“The perception has been that it’s a gas prone basin and not oil prone,” Meckel noted. “With gas prices like now and historically, it was not an economic area to explore unless you found enormous gas volumes.
“A real attraction is that Indonesia’s domestic market for gas is enormous,” he said. “Southeast Asia is booming now in terms of gas demand, so gas is an exciting play, especially considering that natural gas brings a price there that’s five to ten times higher than North America.
“The potential for oil only adds to the romance.
“Our studies show oil potential in the basin ranging anywhere from perhaps a few hundred million barrels of reserves up to several billion – this makes the area really exciting.
“All of the plays we’re exploring for are proven in the onshore basin, so it’s the same story you see around the world,” Meckel noted. “You take a proven onshore basin and apply newer technology in terms of drilling, 3-D seismic, the more sophisticated techniques we have now for understanding the geology and take this into deepwater.”
Ironically, given the long history of onshore exploration, the offshore NSB is a bona fide frontier, with fewer than 10 wells total drilled in deepwater and only five of these going down in the last decade.
The dearth of offshore exploration activity and the maturity of the onshore region yields a creaming curve for the basin overall that has remained flat for the past three decades. This comes as no surprise, considering the creaming curve is a diagram that plots oil discovered compared to the amount of exploration that happens.
When a basin is creamed, it’s very mature.
The flat-line curve for the NSB, therefore, suggests to some explorers that there is nothing of substance left to be found – overlooking the unexplored offshore area’s impact on the curve.
Meckel emphasized that comparison with other prolific basins in Southeast Asia indicates the offshore NSB has significant growth potential.
“This potential has been confirmed by recent exploration efforts, which have highlighted exciting possibilities in at least five plays based on recently acquired and re-processed 3-D seismic surveys in the offshore NSB,” he said. “Many of these plays are offshore extensions of proven plays in the onshore NSB.”
In effect, the offshore “frontier” has been sitting and waiting for aggressive explorers to apply advanced technology in a basin that could have multiple billions of barrels of reserves left to find, according to Meckel.
The five plays identified are in the Lhokseumawe Production Sharing Contract (PCS), where a high quality 3-D data set recently was acquired. It is located at the southern end of the offshore NSB and is the immediate offshore extension of the onshore NSB.
Traps are clearly visualized on the 3-D seismic data, according to Meckel. Most have a strong element of structural closure, but generally require a stratigraphic trapping component. Certain traps have DHIs associated with them, and existing well data document that gas is omnipresent in the system, indicating the presence of prolific source rocks. Oil also is present.
Meckel employer Zaratex, N.V., will drill three wells in the offshore NSB this year, the most exciting of which likely will spud during the AAPG ICE in Singapore. He noted the potential for as many as two or three follow-on wells in 2013.
The initial well sits in 3,000 feet of water, with TD estimated to be 12,000 feet subsea.
“We’re looking for a discovery of both oil and gas in a very large limestone reef,” Meckel said.
The targeted horizon is Middle Miocene carbonates, which are found in most of southeast Asia.
“They’re the most prolific play in the region,” Meckel emphasized. “In the NSB proper, they account for 75 percent of discovered volumes but only 25 percent of fields discovered, meaning 25 percent of the fields are responsible for 75 percent of the volume.
“This is a very prolific and prized potential target,” he noted. “We have 13 potential prospective carbonate buildups and estimate average success volumes of one Tcf of gas for each.”