PC North Madura II Makes Final Investment Decision for Hidayah Oil Field in Indonesia

PC North Madura II, a subsidiary of Malaysia’s state-owned energy player Petronas, has confirmed a final investment decision (FID) for an oil field in the North Madura II contract area, East Java, Indonesia.

The FID comes a year after SKK Migas, Indonesia’s oil and gas regulator, confirmed the green light for a development plan related to the Hidayah oil field, with approximately 88.55 million stock tank barrel oil reserves. Based on the development plan, the field will come into operation in early 2027, with an initial production of 8,973 barrels of oil per day. The peak production of 25,276 bpd is expected to be reached in 2033.

Mohd Redhani Abdul Rahman, Petronas’ Vice President of International Assets of Upstream, highlighted: “Reaching the FID for the Hidayah field is a significant milestone for Petronas in Indonesia. This achievement builds on the momentum of our promising oil discovery in the North Madura II contract area in 2021, paving the way for us to play a more strategic role in supporting the region’s growing energy needs.”

As the operator and owner, Petronas has a 100% interest in the Hidayah production sharing contract (PSC). The development plan encompasses the drilling of oil production wells, supported by an unmanned integrated wellhead and central processing platform. The plan entails a floating storage and offloading (FSO) unit with living quarters and a central control room.

Mohd Jukris Abdul Wahab, Petronas Executive Vice President and Chief Executive Officer of Upstream, commented: “This milestone underscores Petronas’ unwavering commitment to supporting the government of Indonesia’s target of achieving energy self-sufficiency.”

The Malaysian giant operates the Ketapang, North Madura II, and North Ketapang PSCs offshore East Java, alongside the Bobara PSC offshore West Papua. The company is also a joint venture partner in five PSCs spanning onshore and offshore Sumatra, the Natuna Sea, East Java, and East Indonesia.

Petronas Expands Global Footprint with Sustainable Energy Initiatives

Given the growing energy transition momentum, Petronas is keen on expanding its global footprint while exploring lower-carbon initiatives to support sustainable energy development. Last week, the company, through Malaysia Petroleum Management (MPM), in collaboration with Beicip Franlab Asia, embarked on an integrated basin study.

This study, which leverages advanced 4D modeling and machine learning technologies to analyze the subsurface architecture at both basin and reservoir scales, will explore untapped resources in the Malay Basin, located off the coast of Peninsular Malaysia.

Petronas’ study is focused on predicting hydrocarbon migration and entrapment by harnessing big data from the Malay Basin, where over nine billion barrels of oil equivalent have been produced since the 1970s. A batch of recent exploration activities have also yielded more discoveries.

Exploring Opportunities Beyond Hydrocarbons

As such discoveries are interpreted to highlight the basin’s continued potential, the Malaysian player is convinced this basin presents substantial opportunities beyond hydrocarbons, such as for carbon capture and storage (CCS), positioning it high on the sustainable energy development chain.

Azmir Zamri, Senior General Manager of Resource Exploration at MPM, pointed out: “The Malay Basin, often regarded as mature, still holds significant untapped potential, as demonstrated by discoveries such as Bunga Aster and Bekok Deep.

“Through our collaboration with Beicip Franlab Asia on the Integrated Basin Study and our AI-enabled geophysical initiatives with Earth Science Analytics, we aim to redefine what is possible and unlock new opportunities in this prolific region.”

Petronas’ Commitment to Sustainable Energy Development

In line with its goal to drive growth through sustainable energy initiatives and its target to achieve net-zero carbon emissions by 2050, Petronas is part of a joint industry partnership (JIP) to step up carbon capture, utilization, and storage (CCUS) projects. The firm took the final investment decision to develop the Kasawari CCS project, said to be Malaysia’s first offshore CCS project, at the end of 2022, followed by the award of the EPCIC contract to Malaysia Marine and Heavy Engineering (MMHE).