OTC-26746-MS

Straits of Malacca Exploration Campaign - Lessons Learnt and Key to

Success
William Liew Sin Yoong, Fadzliana Azmi, Azral A Rahim, Syazwan A Ghani, M Faisal Rizal Idris,
M Ramdan Idris, and W M Syazwan W Ibrahim, PETRONAS Carigali Sdn. Bhd.; Hamdan Abd Rahman,
PETRONAS; M Rizal Sawal, and Terrence Lawai Wan, PETRONAS Carigali Sdn. Bhd.

Copyright 2016, Offshore Technology Conference

This paper was prepared for presentation at the Offshore Technology Conference Asia held in Kuala Lumpur, Malaysia, 22–25 March 2016.

This paper was selected for presentation by an OTC program committee following review of information contained in an abstract submitted by the author(s). Contents
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Abstract
Straits of Malacca Exploration Campaign marks PETRONAS’ first oil/gas well drilling in the region of
West Coast of Peninsular Malaysia. Three (3) exploration wells were drilled in a period of four (4)
months. This paper will highlight the challenges, lessons learnt and key to success of this fast track drilling
campaign in a new region of operation.
The team which was entrusted with the mission to drive PETRONAS’ quest of oil and gas in this new
region were then given six (6) months to deliver the first well out of three (3) exploration wells. Apart
from the uphill task to set up staging base and logistics support in the West Coast of Peninsular Malaysia,
the team faced challenges of drilling in one of the world’s busiest shipping lane. Navigational safety is
one of the main concern here. Besides, two (2) of the three (3) wells were located close area where sea
robberies and hijacking were rampant. In terms of drilling operation, two (2) of the wells were exposed
to the risk of total losses. This paper will share the approaches taken by the project team in overcoming
challenges in three (3) main areas - (1) logistics; (2) navigational and offshore safety and security; and (3)
well engineering.
Although faced with numerous challenges together with limitation of time and resources, the project
team has managed to deliver all the three (3) wells successfully, meeting all the geological objectives
within Authorisation For Expenditure (AFE) cost. On top of that, the drilling campaign was completed
with zero Lost Time Incident (LTI) and zero accident. Another notable success in this project is setting
up the modus operandi in a new region of drilling within six (6) months. Due to the fast track nature of
this campaign, first of the three (3) wells was spudded concurrently with 3D seismic interpretation by
taking the risk of relying on 2D seismic data. Halfway through the well construction, Well #1 (Well A)
was re-sanctioned based on the findings while drilling and latest 3D seismic data received. Target depth
of the well was revised to 3130m TVDSS from initial 2100m TVDSS. Despite all the challenges, the
drilling team managed to complete drilling operation of three (3) wells ahead of time by 11 days in total.
Apart from engineering and logistics challenges, this paper will share the experience of drilling in one
of the busiest shipping lanes in the world. Lessons learnt and key success factors of this fast track
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exploration drilling campaign will be beneficial to all oil and gas (O&G) operators, especially to those
planning to operate in the Straits of Malacca or any other similar regions in the world.

Introduction
PETRONAS decided to embark on a journey in exploring the untapped hydrocarbon (HC) resources in
the Straits of Malacca. Three (3) exploration wells were successfully delivered. Upon receiving drilling
request from Malaysia Petroleum Management (MPM), a small team was formed within Wells Explo-
ration - MPM, PETRONAS Carigali Sdn. Bhd. (PCSB) to spearhead the planning and execution of an
exploration campaign in the Straits of Malacca, a region where PETRONAS has never drilled before.
According to record, a total of six (6) wells were drilled in this waters by two (2) different foreign oil
companies. Since then, the potential of HC resources in this area was never been explored.
The three (3) wells were located at two (2) different open blocks and were drilled back to back using
a semi-submersible drilling rig. The first well was drilled to penetrate the pre-tertiary metamorphic
basement while the second and third wells aimed to penetrate carbonate basement.

Logistics
Overall, logistics poses as the main challenge in this new region of operation. Within the short span of six
(6) months, project team manage to (1) devise a complete modus operandi, (2) select and set up staging
base, (3) select and set up helibase and (4) arrange land transportation between Kemaman Supply Base
(main offshore supply base in Peninsular Malaysia) and staging base in Penang Port.

Modus Operandi
The semi-submersible rig used in this exploration campaign was supported by three vessels for offshore
supplies - Two (2) of the vessels are anchor handling and tug vessel which were also used to tow the
drilling rig to location and off location.
Figure 1 above summarises the overall modus operandi in this exploration drilling campaign. Kema-
man Supply Base (KSB) was the main supply base where all the drilling material and equipment were
supplied. In order to overcome the setback of long transit time between Kemaman, which is in the east
coast of Peninsular Malaysia and well locations, which are in west coast of Peninsular Malaysia,
Butterworth Wharves in Penang Port was selected as the staging base. Supplies were transported by land
from KSB to Penang Port before they were shipped to well locations. As compared to 4-5 days sailing
time from KSB to Penang Port, land transits which take approximately 14 hours greatly reduced the
logistics constraints. Sailing time from stanging base in Penang Port to the well locations take between
7 to 14 hours.
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Figure 1—Overall modus operandi of Straits of Malacca drilling campaign

Land trucking was carried out on regular basis and well planned in advanced to ensure smooth running
of drilling operations and at the same time, minimise the standby cost of drilling equipment at the staging
base. A freight forwarding agent was appointed to handle logistics requirements which include custom
clearance, port clearance, vehicles for material transportation, port facilities, storage area and other
logistics support. In order to minimise land transportation risk in this project, most of the oil country
tubular goods (OCTG) and bulks were mobilised by spot chartered vessel from KSB to Penang Port.
Selection of Staging Base
Based on the specific requirement of this drilling campaign, a set of criterias were set by project team in
staging base selection. Five (5) ports at the west coast of Peninsular Malaysia, near wells location were
surveyed and evaluated. List of criterias are as below:
● Distance to well
● Berth
X Number of berths available.
X Minimum length of berth - 70m
X Loading priorities.
X Pilotage requirement.
X Light source for night loading.
● Water Draft
X Minimum water draft of 6m.
● Fuel And Water Bunkering
X Availability of fuel and water bunkering facilities.
X Fuel supply from PETRONAS Dagangan Bhd (PDB).
X Water supply from port.
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● Open Yard
X Requirement of 7000 sq m open yard
X Availability of security at yard
X Availability of material handling equipment - Crane, forklift and etc.
X Distance of yard to berth
● Covered Warehouse
X Requirement of adequate warehouse space
X Availability of security at yard
X Availability of material handling equipment - Crane, forklift and etc.
X Distance of yard to berth
● Bulk Silos
X Availability of silos for barite, bentonite and class G cement.
X Support equipment for bulk transfer to vessels.
● Chemical and Explosive Storage
X Availability of chemical and explosive storage if required.
● Custom Authority
X Current arrangement with authority
X Availability of authority for weekend loading
● Material Handling Equipment (MHE) and manpower
X Availability and capacity MHE services and manpower for loading / offloading activities.
X Availability of services and manpower during weekend and holidays.
● Waste
X Availability of waste management and disposal
● Food provision
X Availability locally
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Figure 2—Comparisons between five (5) ports on technical viability. Penang Port is most technical viable among all the ports

Apart from technical viability, commercial evaluation was also conducted on the staging base
selection. These includes documentation cost, land transportation cost and port/base support service cost.
Penang Port (Butterworth Wharves and Prai Bulk Cargo Terminal) was found to be the most technically
capable and commercially viable to be used as the staging base for this drilling campaign.

Figure 3—Penang port distance from each well

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Figure 4 —Penang Port top view

Figure 5—Butterworth Wharves plot

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Small office set up in front of berth in Butterworth Wharves for Materials Coordinator, Freight
Forwarder and Contractors. Open yard was used to store OCTG while covered storage stored chemical
products that were used for drilling fluid.

Figure 6 —Butterworth Wharves fuel and water bunkering.

Selection of Helibase
Helicopter was chosen as the main mode of crew transportation in this project. Two (2) airports at the west
coast of Peninsular Malaysia, namely Penang International Airport and Langkawi International Airport
were surveyed and evaluated to be used as temporary helibase. Langkawi International Airport was chosen
as it met all technical requirements as well as capable to handle flights requirement in this project. Penang
International Airport on the other hand met all technical requirements but not as flexible in handling the
flights requirement due to busy airport traffic.
Apart from providing a dedicated helicopter for this project, the company which won the helicopter
provision tender was also given the task to set up a temporary helibase in Langkawi International Airport.
This includes all arrangement with airport authority, Department of Civil Aviation, temporary office,
check in counter, briefing room and other related services.
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Figure 7—Helibase set up in Langkawi International Airport

Figure 8 —Airport distance to well location

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Figure 9 —Crew Change procedure at the Langkawi International Airport

Throughout the whole drilling campaign, alcohol test was successfully implemented. All personnel
involved in the operation underwent mandatory alcohol test at helibase prior to boarding the flight to rig.

Selection of Land Transportation Mode - Transportation from Kemaman Supply Base to

Penang Port.
Main consideration in land transportation plan is the route to be taken. For this purpose, Operator
Company’s Health, Safety and Environment (HSE) Department and appointed freight forwarder together
with the project team had conducted a route survey and developed Journey Management Plan.
Trucks from KSB will go through Lebuh Raya Pantai Timur (LPT - East Coast Highway) to Jalan
Duta, Kula Lumpur via (DUKE Expressway). From there, Lebuhraya Utara Selatan (PLUS - North South
Highway) will be used to head to Penang Port. The journey took approximately 14 hours. All the drivers
in this campaign were required to undergo defensive driving training and the trucks were equipped with
Oncore Fleet System for monitoring purposes.
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Figure 10 —The route from KSB to staging base, Penang port

Penang Port is a commercial port that has never handle any oil and gas industry operation before.
Unlike the other existing supply bases in Malaysia such as KSB and Asian Supply Base in Labuan, more
effort and discussions were carried out to secure the cooperation and support of Penang Port Commission
and Royal Malaysian Custom.
Due to the business nature of this commercial port, there are certain dangerous goods that were
scrutinised by the port authorities. Specific measurements had to be taken by project team to address this
issue. Dangerous goods mentioned here include chemical and explosives.
Below are the chemicals and explosives transfer process through Penang Port:
● Cargo will go through Penang Port Commission main gate and enter Free Trade Zone to wharf and
on to vessel.
● Estimated transit time 20 minutes.
● Cargo that is transferred on to vessel alongside wharf, will be accompanied by fire brigade inside
the port area. (Cargo will only be allowed to move into port area when vessel is confirmed to be
alongside).
● Fire brigade and Competent HSE representatives will be stationed at location during loading.

To prevent any delay in material or equipment for drilling operations, mobilization of most of the
material and equipment started two to four weeks prior to start of the drilling campaign. Three (3) material
coordinators were appointed for the drilling campaign, one each in Kuala Lumpur (Head Office), KSB
(Main Supply Base) and Penang Port (Staging Base).
Navigational and Offshore Safety and Security
Utilisation of Automatic Identification System
Besides a short duration for planning, the team faced challenges of drilling in one of the world’s busiest
shipping lane. Three (3) wells were located close to high shipping traffic lane in Straits of Malacca.
Possibility of vessel to vessel collision or vessel to rig collision is higher compared to other oil and gas
drilling areas in Malaysia. Navigational safety was one of the main concerns.
After series of risk assessment and mitigation planning, project team had decided to utilize Automatic
Identification System (AIS) to monitor vessels traffic around the wells area. This system enable the team
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to monitor any vessels heading towards the rig site and to warn them accordingly. The Automatic
Identification System (AIS) is a tracking system used on ships and by vessel traffic services (VTS) to
identify and locate vessels by electronically exchanging data with other nearby ships. Patrol vessels will
also assist to warn and clear the drilling site from any other vessels.

Figure 11—Screenshot of AIS system overlay with the wells location. The red triangles show the moving vessels while the green
triangles show stationary vessels.

Apart from that, Well A is nearer to shore. There are a lot of fishing activities and fish trawls around
the well area. Prior to drilling commencement, notification was sent to Mariners and Department of
Fisheries to alert them about the drilling campaign and to get their assistance to clear any fishing boats
or fishing activities around the well area. Mariner also broadcasted rig coordinates to all vessels moving
through Straits of Malacca for collision avoidance.
Engagement with Government Agencies and Authorities
Two (2) of the three (3) wells in this campaign were located close to international border and also at area
where sea robberies and hijacking were rampant. The area of concern was primarily at Northern and
North-West in Straits of Malacca, near Sumatra.
To overcome the challenges of offshore security, the team obtained security assistance from National
Security Council (NSC). After a series of discussions, Malaysia Maritime Enforcement Agency (MMEA)
was assigned by NSC to lead the security coverage assistance which include 24/7 monitoring of drilling
rig by MMEA patrol vessel, scheduled air surveillance and emergency response by Royal Malaysian Navy
and Royal Malaysian Air force, if the need arises. MMEA as the lead agency, will coordinate with other
authorities through NSC if required.
Emergency Response Plan and Site Specific Emergency Notification Flowchart
The Operator Company existing emergency response plan did not cater to this new region of operation.
Unlike offshore activities in PMO, Sabah Operations (SBO) and Sarawak Operations (SKO), there is no
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available facilities in Straits of Malacca waters if any assistance is required. Therefore, the team
established a Site Specific Emergency Response Plan and Incident Notification and Response Flow Chart
whereby an Emergency Management Team (EMT) was formed and based in Kuala Lumpur, specifically
to handle this drilling campaign. The Emergency Management Team in Kuala Lumpur acted as the first
line of contact, replacing region offices such as PMO, SBO and SKO. Trainings with the EMT was
conducted to ensure that the members are aware of the company’s procedure in emergency response and
management.
Site Specific Medical Evacuation (MEDEVAC) Plan
The team had also established a new MEDEVAC plan specific for the Straits of Malacca Drilling
Campaign. A service provider was appointed for this purpose. Site health surveys were conducted by the
service provider in Penang and Langkawi to evaluate local medical facilities and capabilities that are close
to the drilling site. As a result from the evaluation, Penang General Hospital was identified as the
MEDEVAC receiving point. Helicopter from Langkawi Helibase will be used for MEDEVAC and the
appointed service provider will prepare for all ground arrangements i.e. ambulance, medical officers
escort and others. One dedicated medical officer was stationed at the helibase in Langkawi International
Airport throughout the drilling campaign for MEDEVAC assistance.

Figure 12—MEDEVAC plan for Straits of Malacca drilling campaign

Site Specific Oil Spill Response Plan

Oil Spill Response Plan was established with Petroleum Industry of Malaysia Mutual Aid Group
(PIMMAG) and Oil Spill Response Limited (OSRL). Based on the oil spill modeling carried out, oil spill
will take more than 24 hours, mostly range within three (3) to five (5) days to any shoreline. Thus,
PIMMAG and OSRL has adequate time to respond from Port Dickson and Singapore respectively prior
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to any shoreline contact. Plans were in place to ensure prompt response to any oil spills events. After
exhaustion of drilling rig’s Tier 1 response, the main strategy is to use aerial dispersant:
● OSRL aircraft for dispersant spraying
● PIMMAG’s supplementary dispersant to be stored at nearby airport
Following are the minimum time until exposure to neighboring country waters:

Table 1—Summary of Oii Spiii Modeiiing Resuits

Any spill to neighboring country’s waters requires international response which involves Government
to Government communication. If such a need arises, Operator Company will continue to handle the
situation but overall incident command and international liaison will be managed by Malaysian Govern-
ment (National Oil Spill Control Committee (NOSCC), Wisma Putra).
Well Engineering
Pressurised Mud Cap Drilling (PMCD)
Record from the offset wells that were drilled in this waters showed that the wells near to Well B and Well
C (in the same block) experienced heavy to total losses while drilling. Moreover, Well B and C target
formation is carbonate basement which is well known for extensive fractures which often lead to losses
while drilling. Hence, the team opted to utilise PMCD in drilling Well B and C. Due to the well location,
logistics in bringing and storing Light Annular Mud (LAM) contributed greatly to the challenges faced.
However, this was overcame by detailed planning on the timing of operations and the volume requirement
Another challenge in drilling carbonate formation using PMCD system is the requirement to case off
the shale section before drilling into carbonate section where the losses zone are. To achieve this,
Carbonate Drilling Protocol was implemented during operations, whereby circulations of bottoms up were
performed at every short intervals to ascertain the lithology at hole section target depth (TD). Ultimately,
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the aim is to set the casing shoe in top of carbonate, to isolate all shale layers. However, the tricky part
is not to drill into losses zone in the carbonate before PMCD system is in place. In Well B, the team
decided to stop drilling when 30% of carbonate was observed in the cuttings. This turned out to be one
of the few lessons to be learnt in this campaign because 7m of shale was left below the casing shoe. In
Well C, the team decided to increase the cuttings sample to 50% carbonate before stop drilling and it
proved to be a good strategy whereby all shale section was covered and casing was set in the top of
carbonate. In this well, losses was experienced not too far from the casing shoe.
Conclusion
Completing this campaign with good safety records, within budget and ahead of planned schedule was a
great success to the team and company. All in all, planning and execution of a fast track project of this
scale is not possible without the large resources within the company and support of all those who were
involved. Hopefully this exploration campaign will drive more opportunities in developing the nation’s
resources in this region.