EXECUTIVE SUMMARY LAMPUNG 1 BLOCK, SOUTH SUMATERA

EXECUTIVE SUMMARY
The Offshore Lampung Block-I (Lampung-I) is located in shallow water of Java Sea, approximately 45 minutes helicopter flying time from Jakarta and situated adjacent to producing oil fields as well as infrastructure. Geologically this block lies in a prolific petroleum system, southern flank of a classic major Tertiary back-arc basin, the Sunda and Asri basins in the North West Java geological province. Primary hydrocarbon kitchen that charging the play in this region is expected to be migrated from both Asri Basin to the South of the block and co-sourced from both Fifi (NW-Asri) and from NE-Asri sub basins. The Asri basin has generated in excess of 9.6 BBO whilst to date only 1.2 BBO has been discovered. Implementing 30% efficiency, then 2 BBO more generated hydrocarbon yet to be discovered. This block is located immediate to the north of this prolific basin and very likely is connected through extension fault system. The Fifi (NW-Asri sub basin) has generating capacity of 429 MMBO while NE-Asri sub basin has 444 MMBO. These two sub basins are expected to charge plays to the north of these sub basins. So far no wells have ever drilled in the region adjacent to these two sub basins. Re-interpretation of 91J series and 72 (hardcopy) series seismic vintages, available well data and geological understanding of the region were conducted to identify prospectivity of this block post previous operator relinquishment. Both structural and stratigraphic were carefully examined to investigate possibility of remaining undiscovered hydrocarbon could be trapped. At least 7 leads have been identified having EUR ranging 30 MMBO to 180 MMBO yet more seismic data are required to further validate their geometries. Based on this evaluation, this block is deemed possessing active petroleum system, having high probability to high-grade those leads into drillable prospects and is recommended to be further explored.

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EXECUTIVE SUMMARY LAMPUNG 1 BLOCK, SOUTH SUMATERA

INTRODUCTION
In 2005, the Directorate of Oil and Gas Republic Indonesia has put several venture, both onshore and offshore blocks on an open tender basis. Thses blocks are all intended to be governed under PSC terms and regulations. Among the tendered blocks are the Offshore Lampung Block-I (LampungI) & Offshore Lampung Block-II (Lampung-II), that are located approximately 90 km northwest of Jakarta (Figure 1-01) in shallow water of the Java Sea. These areas representing an offshore area of 4,238.75 km2 and 4,139.70 km2 respectively. Geologically, the southern portion of the area is representing part of northern flank of the Asri basin that has been for a long time becoming focus of hydrocarbon exploration. Rough estimation has indicated that the total recoverable hydrocarbon reserve found is in excess of 1.2 BBO that proofing the Asri basin as a proven prolific basin. Almost all the commercial hydrocarbon discoveries have been made in Middle Oligocene to Early Miocene reservoirs in the western flank of the Asri basin. Efforts to explore the hydrocarbon potential of this region has intensively performed by numerous international oil and gas operators commenced by IIAPCO (Independent Indonesian American Petroleum Company), Maxus, Repsol-YPF, CNOOC as well as joint operating body (JOB) between Pertamina and Maxus. Exploration activity in the western flank of the Asri basin has successfully discovered the most productive fields ever discovered in the region, the Intan and Widuri fields, that have reached peak production of 100, 000 BOPD in 1998. In addition to that, at least 5 marginal field have been found in the west flank of the basin. These fields are currently producing 60,000 BOPD from the Gita and Zelda sand of the Talang Akar Formation. The Asri Basin is located approximately 30 miles northeast of the Sunda Basin, and comprises an offshore area of approximately 1120 square miles area around 25 miles northeast of the Seribu graben. The basin is asymmetric, with a gently dipping west flank and with the depocentre of
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EXECUTIVE SUMMARY LAMPUNG 1 BLOCK, SOUTH SUMATERA

the basin bounded in the east and south by an arcuate normal fault system. The northern boundary of the basin is formed by the on lap of the sediments against a monoclinally rising basement. The Oligocene Talang Akar is the oldest sedimentary sequence recognized, attaining a thickness in excess of 16,500 ft in the axis of the basin. Above the Talang Akar is a conformable sequence of Batu Raja marls, Gumai shales, Air Benakat sandstones and shales, and Cisubuh marine shales. The Cisubuh Continental shales and coals are the youngest recognizable sediments in the basin. They rest uncomfortably on the Cisubuh Marine sequence. The last operator of this region, the JOB Pertamina-Maxus after drilled three exploratory wells in the region in the vicinity of the Offshore Lampung block-1 and block-2 (the Armani-1, NE Beti-1 and Beti-1) found only oil shows in the Beti-1 well. Following those failures, the block was subsequently relinquished to the government in the 1993.

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EXECUTIVE SUMMARY LAMPUNG 1 BLOCK, SOUTH SUMATERA

EXPLORATION HISTORY
Early evaluation of the exploration target of the North Java Sea during the late 1960s was the Sunda and Arjuna basins. Independent Indonesian American Petroleum Company (IIAPCO) representing the first offshore PSC operator that signed the ownership of the block on August 18, 1966 in the region that encompassing almost the entire of Sunda and Asri basins. Extensive exploration activities were conducted by IIAPCO in the Sunda basin between 1966 and 1986, and discovered structural play and stratigraphic trap of Cinta, Rama, Kitty, Selatan, Yvonne, Krisna, Farida, Zelda, Titi, Wanda, Gita, Sundari and Karmila fields. In the now Lampung-I and Lampung-II area IIAPCO shot some 700 km of 2D seismic data in 1968 and followed by drilling two exploration wells in 1970 : Gayatri-1 and Enny-1 and subsequently the Anda-1, NW Anda-1 and Fifi-1 exploratory wells. These wells unfortunately had failed to discover hydrocarbon potential in the region and were abandoned. Following silence and then no significant exploration activities in this region, eventually IIAPCO relinquished the Lampung I (and Lampung II) areas in 1980 to fulfill the PSCs exploration relinquish commitment. In 1982 Maxus, an independent British oil & gas company took over all IIAPCO assets in the SE Sumatra Block and established Maxus South East Sumatra (Maxus-SES) as the new operator. Following their aggressive exploration campaign, in 1987 Maxus SES discovered the structural and structural-stratigraphic play of Intan and Widuri field in the Asri basin just northeast of the Sunda Basin. These producing fields are evidence that the Asri basin proven to be oil generative basin. In 1990s, exploration was focusing in stratigraphic trap of the fluvial channel of the Talang Akar Formation and discovered marginal fields of Aryani, Indri and Lidya fields. These fields are located in the west flank of the Asri basin just to the south of the Lampung-II. With the discovery of the Intan field 1987, a study of the Fifi area was undertaken with a Technical Evaluation Agreement (TEA) between Pertamina and Maxus Southeast Sumatra. Maxus in 1990 pursued
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EXECUTIVE SUMMARY LAMPUNG 1 BLOCK, SOUTH SUMATERA

negotiation with Pertamina, which resulted in the JOB Agreement known as JOB Pertamina Maxus Fifi Zaitun Inc., and operate the area called Fifi Zaitun Block that encompassed the Lampung-I and Lampung-II Blocks and an area east of the SE Sumatra Block. The JOB Pertamina-Maxus had conducted gravity and magnetic survey, seismic acquisition of 2595 km and drilled 3 exploratory wells of Armani-1, Beti-1 and NE Beti-1 yet only Beti-1 encountered oil show in the Talang Akar fluvial sands. Subsequent to this failure, the JOB Pertamina Maxus concluded that the remaining prospects & leads within the Fifi Zaitun Block are of sub economic in sizes due to its relatively small in size, high risk of hydrocarbon migration and contract terms and stand alone JOB development prelude commercial consideration of small risk reserves. Therefore, JOB Pertamina Maxus finally relinquished their Fifi Zaitun concession area in 1993. Since then until early 2005 the status of the area was open un operated block. Recently the Directorate General Oil & Gas divided the area into two concession blocks, The Offshore Lampung Block-I and the Offshore Lampung Block-II, and put them in the oil & gas license regular tender in 2005 bid round.

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