Southeast Asia continues to be an area of opportunity and
growth for Talisman. The Company plans to increase spending
on project developments, as well as ongoing exploration and
appraisal of its offshore acreage in Vietnam. The Northern Fields
development in Malaysia/Vietnam is progressing with first gas
anticipated in mid-2008 and first oil early in 2009. In Vietnam,
Talisman’s second exploration well on Block 15-2/01, Hai Su
Den, was successful and tested at a combined rate of over
21,000 boe/d. In Indonesia, the Suban 2 gas expansion project
at Corridor was completed and gas sales to West Java began
in October.
Southeast Asia
2007 in Review
In Southeast Asia, exploration and development spending totaled $512 million in 2007. The Company drilled 38 successful oil and gas wells, including two exploration wells.Liquids production averaged 44,167 bbls/d, a decrease of 14% from 51,582 bbls/d in 2006, mainly attributable to natural declines and delayed commissioning of facilities in Malaysia/Vietnam and a riser failure in Australia. Natural gas production averaged 287 mmcf/d, down slightly from 292 mmcf/d in 2006.
The Company added 25 mmboe of proved reserves during the year (before net acquisitions and dispositions). At year end, Talisman had 484 mmboe of proved reserves in Southeast Asia.
Operating costs during the year averaged $4.96/boe, up from $4.47/boe, mainly due to increased fuel costs, an extended weather-related turnaround, marine costs and workovers.
In Malaysia/Vietnam, the gas export pipeline was commissioned to Cau Mau, Vietnam. In addition, facility work and upgrades were performed on the Bunga Raya-A platform. Final commissioning of the Bunga Raya-E gas processing platform was also completed.
Development of the Northern Fields in PM-3 CAA progressed. Development drilling commenced on schedule in late 2007 and a number of platforms and other major pieces of equipment were installed during the fourth quarter. In mid-2007, two gas wells in the Southern Fields also came onstream at a combined rate of 100 mmcf/d gross sales gas. Unitization of the Murai South Channel oil pool in PM-305 was also successful, giving Talisman a 9% share of production.
In Indonesia, the Suban 2 gas expansion project was completed. In addition, the Suban 10 and 11 wells combined produced a weekly record of 529 mmcf/d gross sales gas. Gas sales to West Java began in October at 50 mmcf/d gross sales gas. In Indonesia, natural gas production averaged a record 228 mmcf/d, up 11% over 2006.
In December 2007, Talisman acquired a 3.06% interest in the Tangguh LNG Project. The project, located in West Papua, Indonesia, consists of a number of offshore gas wells, production facilities, pipelines and LNG plant facilities with a nameplate capacity of 7.6 million tons per year. First LNG is expected in late 2008.
In Vietnam, Talisman completed a five-well development drilling program in the Song Doc field in Block 46/02, with first oil expected in the third quarter of 2008. In addition, the first exploration discovery well in Block 15-2/01, Hai Su Trang, tested at a combined rate of 14,683 bbls/d of oil. The second exploration well, Hai Su Den, was successful and tested at a combined rate of over 21,000 boe/d.