LONDON (Alliance News) - Andalas Energy & Power PLC Wednesday said the Indonesia state-owned energy company has approved its proposed work programme for the Tuba Obi East project that aims to produce gas to feed a small, independent power project.
"Over the past two months we have been working closely with [national energy company] Pertamina and our joint venture partner, PT Akar Golindo, to determine the most cost effective way to evaluate the gas in Air Benakat Formation at Tuba Obi East," said Chief Executive David Whitby.
"Pertamina has recognised the significant potential of the Pertamina has recognised the significant potential of the Air Benakat Formation gas, its close proximity to a high demand energy market, and that the proof of concept work programme will quickly and efficiently assess the gas quality, quantity and deliverability," he added.
The programme will start by re-completing the TOE-1 well, one of three wells to have already been historically drilled on the field, and production testing the gas bearing Air Benakat Formation.
Andalas said the programme will reduce near-term costs by around 60% as it will no be drilling a new well, but the workover will provide valuable data to the firm so it can plan future drilling activities.
Andalas, as the technical operator, is now finalising the re-completion design, tender documents, and mobilisation plans. Budgetary approval for the programme will be sought from Pertamina in the coming weeks, following which work will commence onsite.
Andalas shares were up 5.2% to 0.150 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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