SEAPEX Exploration Conference 2015

Fairmont Hotel, Singapore

15th – 17th April 2015

Day: Thursday 16 April Session: MTJDA-Malaysia Fields

Time: 11:30 Session ID: 6.2

Abstract

The Kebabangan Gas Field, Malaysia: a 20 Year Journey

Continues
Michael Challis, Carl Curtis, Nur Liyana Mahadzir, James Mennie, Saiful Bahri Zainal
KPOC

Kebabangan Gas Field (KBB) commenced gas production in November 2014,

marking twenty years since drilling KBB-1. Progressive appraisal built the foundation
that underpins the development of a previously believed stranded gas resource. This
journey includes drilling 4 wells by 3 operators finding 2 hydrocarbon phases while
progressing from discovery to first production.

Figure 1 KBBC PSC Location Map

Prior to the current Production Sharing Contract (PSC), the area was originally the
SB1 PSC awarded to Shell/PETRONAS Carigali Sdn. Bhd. (PCSB) in 1987. The
KBB-1 well (1994) was the first discovery drilled in the PSC, at a location 12km NE
of Kinarut-1 (1972), the only prior discovery in the sub-basin. KBB-1 targeted a large
structure with a tilted seismic flat-spot mapped on 2D seismic (Figure 2). The well
was drilled on the structural flank due to poor crestal seismic imaging. Well results
confirmed a significant gas column and thin oil rim in good quality reservoirs and a
hydrocarbon contact corresponding to the mapped flat-spot.
The Kebabangan Gas Field, Malaysia: a 20 Year Journey Continues
Copyright SEAPEX Society
Copyright ©2016 by Southeast Asia Petroleum Exploration Society (SEAPEX)
 SEAPEX Exploration Conference 2015
Fairmont Hotel, Singapore
15th – 17th April 2015

The next exploration stage consisted of acquiring 3D seismic in 1995. This seismic
was re-processed in 2014 and is compared with the original 2D data in Figure 2.
While 2014 seismic has a significantly improved image quality, evidence of improved
acquisition and processing techniques, many elements of the structure, flat-spot and
overburden are present on both seismic lines.
A Gas Holding area over the Kebabangan Gas Field was defined following the KBB-
1 discovery and this expired in April 1999. A subsequent second Gas Holding period
was awarded for three years with a commitment to further appraise the field.

Figure 2 Legacy 2D seismic time data comparison with most recent 3D seismic reprocessing

As part of continued exploration in the PSC several adjacent structures were drilled
resulting in additional gas discoveries. The Kebabangan Gas Field was further
appraised by drilling KBB-2/2ST (2001) located on north side of field in an area of
good seismic quality. The well confirmed a long gas column with a thin oil rim.
Following a successful production test a further two year extension of the Gas
Holding area was approved.
Appraisal continued by drilling KBB-3 (2002) on the poorly imaged structural crest of
the field. KBB-3 penetrated a large gas column and a previously unknown significant
oil column in deeper reservoirs. Extensive production testing in the oil zones resulted
in limited encouragement due to poor flow rates. It was concluded there was
insufficient oil potential to pursue a development and due to the lack of a commercial
gas market, the SB1 PSC was relinquished in April 2004.
ConocoPhillips (COP) and PCSB further pursued appraisal of the field and the oil
upside with the successful creation of the Oil Joint Venture in 2005 which led to
drilling KBB-4 in 2005. No significant oil was encountered but a successful
production test proved a significant gas field had been discovered and increased the
momentum for a gas development. What remained poorly defined was the extent of
the oil.

The Kebabangan Gas Field, Malaysia: a 20 Year Journey Continues

Copyright SEAPEX Society
 SEAPEX Exploration Conference 2015
Fairmont Hotel, Singapore
15th – 17th April 2015

During this period a number of offset discoveries including Malikai (2004), located
31km SW of KBB, were made in the adjacent deep water PSCs G and J by the same
companies that had appraised the Kebabangan Gas Field. COP, PCSB and Shell
studied possible solutions that would enable the development of KBB and establish
synergies with Malikai. This resulted in the creation of the Kebabangan Petroleum
Operating Company Sdn. Bhd. (KPOC) in 2007.
KPOC is a joint operating company comprising of PETRONAS Carigali Sdn. Bhd.,
ConocoPhillips Sabah Gas Ltd. and Shell Energy Asia Limited – the later acting as
Operator of the Kebabangan Cluster (KBBC) Fields PSC. KPOC’s primary purpose
is to develop and operate the KBBC Fields and KBB Northern Hub Facility, to
develop local staff capabilities and of course deliver maximum value to
Shareholders.
Kebabangan Gas Field evaluation progressed through 2008/2009 resulting in the
KBB Field Development Plan (FDP) approval in December 2009. The FDP consisted
of two drilling phases and construction of the KBB platform, an integrated production
facility, built as a gas, condensate and oil processing hub to handle production from
KBBC Fields and future tie-ins from nearby fields.
The platform, measuring approximately 18,000 metric tonnes in weight and 39
metres in height, is one of the largest offshore structures ever built in Malaysia. It is
designed with the capacity to process up to 825 million standard cubic feet of natural
gas, 80,000 barrels of crude oil and 22,000 barrels of condensate daily.
Construction of the largest jacket in Malaysia was completed in Lumut following FID
in 2011. Using a semi-submersible TAD rig, 6 gas development wells were
completed May 2014 followed by the topsides facilities float-over in June 2014. Hook
up and commissioning was completed with first gas achieved on 11 November 2014
as promised at project sanction. Together KPOC delivered on its promise!
Key to KPOC’s success as operator has been the emphasis on delivery and working
together within a multi-company, -national and -cultural environment and a
collaborative governance structure. KPOC’s capabilities were further enhanced by
leveraging Shareholder support and expertise. Many challenges were overcome and
lessons learned in KPOC’s journey to first gas.
The ground up creation of a new operating company to develop the KBBC resources
was a huge accomplishment and first production at KBB is by no means the end of
the journey. While technology has improved dramatically over the years the basic
field outline remains unchanged however technology may be the key to unlocking
the deeper oil potential. The 20 year journey from development to sustained
operations continues with the second phase drilling campaign and the promise of
future development of the deep water Kamunsu East gas discovery and further
exploitation of the PSC area over the next 20 years.
Acknowledgements
KPOC Staff for contributions and Shareholders and PETRONAS MPM for
permission to present.

The Kebabangan Gas Field, Malaysia: a 20 Year Journey Continues

Copyright SEAPEX Society