Publications

As of 2012, INPEX CORPORATION (abbr. INPEX) has a forty-six-year history. INPEX operated three projects in its early years, over the period from (1966-1970), but lost those operatorships after the first exploration period. Since then, INPEX has been active as a non-operating partner in producing Production Sharing Contracts (PSC) in the Offshore Mahakam PSC block (operator TOTAL Indonesie), the Attaka Unit (operator UNOCAL, now Chevron), South Natuna Sea Block B PSC (operator ConocoPhillips), and Berau PSC block (operator BP). In other words, INPEX has enjoyed great financial success as a non-operating partner in successful PSC production in Indonesia. This disequilibrium between technology and finance inspired INPEX’s goal of becoming a producing PSC operator in Indonesia. In particular, Mr. Tamotsu Shoya, the ex-president of INPEX, often openly expressed the hope that INPEX would take this step. Therefore, INPEX continued exploration activities in the North Aceh Offshore PSC, the North Sumatra PSC, East Java Sea PSC V, and the Rabe PSC from 1979 to 1998. INPEX then discovered the Abadi gas field in the Masela PSC Block in the West Arafura Sea in 2000. The North Aceh Offshore PSC and Rabe PSC provided excellent training for a remote deepwater project in the Masela PSC area (not only for explorationists but also for operations personnel). Ten years of studying the petroleum geology of Indonesia were spent before significant gas reserves were discovered with the Abadi-1 well. The pre-bidding study resulted in a low estimate of exploration potential, especially because of the * INPEX CORPORATION Tokyo ** INPEX Rio de Janeiro *** INPEX London ****INPEX Jakarta source risk and potential kitchen (a generation area for hydrocarbons in sedimentary basin) that could generate sufficient hydrocarbons to charge the large structural closure depicted by seismic data. It was difficult to decide whether to bid because of the high risk of presence of a potential kitchen and the high risk associated with development and marketing for the project. INPEX aggressively moved to claim the PSC tender, and was the sole bidder. This paper presents a comparison betweenthe risk estimates made before and after the discovery. Keywords: West Arafura Sea, Masela PSC, Abadi gas pool, remote area, deepwater area.