Mubadala Energy is “new favorite” in Indonesia's exploration sector with Tangkulo-1 discovery, Wood Mackenzie reports

May 14, 2024

(WO) – The recent Tangkulo-1 gas and condensate discovery has placed Mubadala Energy and the South Andaman block at the center of a promising North Sumatra deepwater play, according to Wood Mackenzie.

Chart: A creaming curve of the cumulative reserves discovered against cumulative exploration wells completed (excluding sidetracks) in the North Sumatra basin. Recent discoveries have opened the deepwater area and added significant resource.

This latest discovery adds further volumes to the area, bringing the total in-place resources to 11 trillion cubic feet (Tcf) since Harbour Energy's initial Timpan discovery in 2022. Dr. Munish Kumar, senior analyst for upstream at Wood Mackenzie, expects that Indonesia's latest exploration area will continue to yield positive results.

The Tangkulo well, situated 65 km offshore, has de-risked exploration prospects in the South Andaman block. The quality of the reservoir at Tangkulo is better than that of the Layaran discovery, with higher levels of porosity and permeability, as demonstrated by the high flow-test results.

“Multiple prospects exist across the South Andaman block, and the deepwater basin fan play extends over several blocks, providing confidence that further finds will be made”, Dr Kumar added.

Wood Mackenzie reports that the current gas demand in North Sumatra stands at around 280 million cubic feet per day (MMcfd), which could be a potential obstacle to developing large volumes.

“The Tangkulo discovery improves the viability of a range of development options, including supplying local markets or exporting via LNG or pipeline,” said Andrew Harwood, director of corporate and upstream research at Wood Mackenzie. “If the Tangkulo discovery and other nearby prospects are developed together, they could meet the domestic requirements, enabling Mubadala to explore export solutions for its Layaran find.”

Mubadala Energy will be keen to expedite the development planning process for its finds, encouraged by the record pace Eni is moving its Kutei basin discoveries into commercialisation. SKK Migas, the regulator for oil and gas in Indonesia, will likely also be urging Mubadala Energy to move quickly. According to Wood Mackenzie, the earliest date for gas to be available is in 2028, if a phased and fast-track development is implemented. However, first gas post-2030 may be a more realistic date given the complexities involved. 

“The latest Tangkulo discovery, following the giant Layaran discovery, has made Mubadala Energy the new ‘sweetheart’ in Indonesia's exploration sector,” said Andrew. “However, the next major challenge for the company will be to manage stakeholder expectations by balancing Indonesia's national requirements with its own corporate objectives.”   

Connect with World Oil
Connect with World Oil, the upstream industry's most trusted source of forecast data, industry trends, and insights into operational and technological advances.