The nature of some strategic developments in the energy sector can create an opportunity for major changes to take place under the radar. One example of such a period is when mature fields meet new technology and national energy objectives. Such was the case for Pertamina’s recent collaboration announcement, which may indicate that a familiar Energy Industry is moving towards a larger-scale transformation.
A collaboration driven by increasing domestic pressure for production
In recent years, there has been increasing discussion regarding Indonesia’s potential oil and gas production, particularly as the country seeks to reverse the downward trend in onshore field production due to the age of many of the fields. Therefore, it should come as little surprise that in this environment, Pertamina has entered into a Memorandum of Understanding (MOU) with Halliburton to assess various technologies that may help improve the performance of Indonesia’s existing, established reservoirs.
Pertamina and Halliburton intend to evaluate the application of multi-stage hydraulic fracturing, acid stimulation, and advanced cementing techniques. While these are common techniques found in unconventional plays, they have not typically been applied in Indonesia’s older basins. Halliburton will bring their global unconventional completion methodology and combine it with the localized knowledge of the Indonesian geology to develop solutions based on the best of both worlds.
This is a good example of Halliburton taking their experience and combining it with the knowledge of the local geology to develop solutions for Indonesia. However, the MOU does not provide answers to the critical question of the extent to which these technologies can be scaled across Indonesia’s onshore portfolio.
Signals of larger operational change
While the scope of the MOU suggests that this is more than a trial of individual technologies, the management team at Pertamina views this collaboration as one of several initiatives designed to advance their overall transformation strategy.
According to Pertamina, the strategy is to increase the amount of national oil and gas lifted and increase long-term energy security. Their belief is that with the correct level of expertise, mature fields can once again contribute significantly to national oil and gas production.
One statistic is telling; Halliburton intends to integrate closed-loop automation and artificial intelligence into the drilling and fracturing processes. While both technologies have the potential to deliver improved precision and stimulation effectiveness and operational efficiency, the latter two are particularly important when dealing with complex or depleted formations.
The integration of advanced well construction techniques combined with digital tools suggests that Halliburton is developing a broader vision of an Upstream oil and gas sector where revitalization rather than replacement becomes the main driver of growth in the coming years.
Why does this collaboration matter now?
As Indonesia relies heavily on older onshore assets, using enhanced stimulation techniques represents a viable method to generate increased oil and natural gas production without discovering new reserves. Additionally, the MOU provides Halliburton with an opportunity to expand its presence in Indonesia and demonstrate the applicability of its unconventional completions technology.
The impact in Indonesia could be exponential
Furthermore, Pertamina’s objective to ensure the country’s energy needs are met emphasizes the need for partnerships that can accelerate performance improvements. Together, both parties can leverage global technologies and local operational knowledge to determine whether unconventional methods can support meaningful increases in Indonesia’s oil and gas production over the next few years.
Although the collaboration announced by Pertamina and Halliburton appears non-eventful at first glance, the potential impact on Indonesia’s production strategy is substantial.
Over the course of the next year, the companies’ evaluation of the use of advanced stimulation and automation technologies to enhance the performance of mature reservoirs could represent the beginning of a new era. The future looks like unconventional supported growth in Indonesia, similar to other countries that were able to rejuvenate older reservoirs using modern fracturing techniques.
