Discovered by Unocal in 1998, the West Seno field, lying in water depths of about 3200 feet, is the first deepwater oil field in Indonesia.
Located in the Strait of Makassar, the West Seno field is about 50 km away from the giant Attaka field and 60 km from the Santan terminal in East Kalimantan.
The oil and gas are produced through a tension leg platform (TLP) which is also the first of its kind in Indonesia.
The floating topside of the tension leg platform is attached to the seafloor by four 3200 feet long tendons having a diameter of 26 inches and a wall thickness of 1.036 inches.
Currently, all the subsea wells are produced from platform TLP-A which can accommodate 28 wells. Unocal originally had planned to build two tension leg platforms.
Oil production from the West Seno wells began in 2003 and currently, they are producing about 1200 BOPD. The fluids from the subsea wells are initially separated into oil and gas on the FPU (Floating Production Unit).
The separated oil and gas are then transmitted via two 12-inch diameter and 60 km long pipelines to the onshore facilities at Santan for final handling and storage.
One of the oil production challenges of West Seno is handling the difficult-to-break emulsions. The emulsions are hard to break due to the presence of certain chemicals in the fluid, the decreasing fluid temperature as it rises to the surface, and the motion of the floating platform.
The West Seno offshore production facilities also handle the production from the nearby Bangka field. Bangka field produces about 1000 barrels of condensate daily and 40 MMSCF of gas per day.
The development of the West Seno field was made possible by having a favorable PSC profit splits of 35 percent instead of the regular 15 percent for shelf developments.
Fifty years ago, Union Oil of California (UNOCAL) along with its partner, INPEX, discovered the giant offshore oil field Attaka in East Kalimantan.
General Soeharto, the president of Indonesia at that time, then inaugurated the Attaka field and the Santan terminal on 22 January 1973.
In the early days of Attaka and the Santan terminal, there were many workers from the US and UK. Over time, they were gradually replaced by Indonesian workers.
Unocal operated the oil field for 25 years from its East Kalimantan headquarters located in Balikpapan. The Attaka field was subsequently acquired and operated by Chevron, and then by Pertamina Hulu Kalimantan Timur beginning on 25 October 2018.
At 50 years old, the field is still producing today.
Thousands of oil people – expatriates from many nations and Indonesians from every region – have visited and worked in the offshore facilities and the onshore Santan terminal including me.
I worked in the Attaka field as “Production Foreman” in 1980. I hope you like this snippet of the history of Attaka and the Santan terminal.
Before there was OPEC, there were the “SEVEN SISTERS”.
The Seven Sisters, a consortium of seven world’s largest oil companies, was formed in the 1950s.
Here are the original members of the Seven Sisters:
Anglo-Persian Oil Company (now BP)
Royal Dutch Shell
Gulf Oil (Acquired by Chevron in 1985)
Standard Oil of California (now Chevron)
Standard Oil of New Jersey (now ExxonMobil)
Standard Oil of New York – Socony ( later became Mobil Oil and then ExxonMobil)
Texaco (Acquired by Chevron in 2001)
Although the term “The Seven Sisters” was used for the first time in 1951, these seven companies had been dominating the oil industry since the 1940s. The Seven Sisters were so powerful that at one time, they controlled about 85% of the global oil and gas reserves.
Due to company mergers and acquisitions that took place in the oil industry in the last 40 years, the composition of the seven largest oil companies in the world had changed significantly.
The original Seven Sisters consisted of two European and five American oil companies whereas currently, the seven largest international oil companies in the world consist of four European and three American companies.
Here are the new seven largest international oil companies in the world which are now commonly referred to as the seven SUPERMAJORS.
BP (British Petroleum)
British Petroleum is a British oil company that started as Anglo-Persian Oil Company in 1908 as a subsidiary of Burmah Oil Company. BP grew bigger and bigger by acquiring SOHIO (Standard Oil of Ohio) in 1978, then Amoco in 1998 and ARCO (Atlantic Richfield Company) in 2000.
BP operates in 79 countries with 70,000 employees. The London-based company produces 3.8 million BOEPD of oil and gas.
Chevron began as Standard Oil of California as one of the successors of the original Standard Oil company, the company founded by Mr. John D. Rockefeller after it was broken up into several companies in 1911 under the Sherman Antitrust Act in the US.
Chevron became a huge oil company after acquiring Gulf Oil in 1985, then Texaco in 2001, and Unocal Corporation in 2005.
With headquarters in San Ramon, California, Chevron operates in 180 countries and employs more than 48,000 people. Its daily oil and gas production is about 3.1 million BOEPD.
ExxonMobil that began as Standard Oil of New Jersey is also another descendant of the original Standard Oil company. Standard Oil of New Jersey changed its name to Exxon in 1972, and later on, Exxon became ExxonMobil after it merged with Mobil Oil in 1999.
Operating in 58 countries, ExxonMobil has about 71,000 employees. It produces about 2.3 million BOE of oil and gas daily. The company is based in Irving, Texas.
ROYAL DUTCH SHELL
The formation of the Royal Dutch Shell group came from the merger of Royal Dutch Petroleum Company of the Netherlands and Shell Transport and Trading Company Limited of the United Kingdom in 1907. The Anglo-Dutch company was formed to compete against the powerful American oil company – The Standard Oil.
The Royal Dutch Petroleum Company, known as Koninklijke Nederlandse Petroleum Maatschappij in Dutch, had its root in Indonesia when it was formed in 1890 to produce the oil it discovered in Pangkalan Brandan in North Sumatera and later on in Balikpapan in East Kalimantan.
Royal Dutch Shell became a big player in LNG when it acquired BG Group in 2016.
From its headquarters in the Netherland, Shell operates in 70 countries and has 81,000 employees. The company’s daily oil and gas production is about 3.7 BOE.
Total, a French supermajor oil company, started in 1924 as Compagnie Française des Pétroles ( CFP). It later changed its name to Total CFP in 1985 and finally to Total in 1991.
The company grew even bigger after it acquired the Petrofina of Belgium in 1999 and then ELF Aquitaine in 2000.
Based in France, Total has operations in 130 countries and it employs more than 100,000 employees. It produces 3 million BOEPD of oil and gas.
ConocoPhillips started as Conoco 1875 in the US. Conoco merged with Phillips Petroleum Company to form ConocoPhillips in 2002.
Based in Houston, ConocoPhillips involving only in the upstream part of the oil industry is the world’s largest independent oil company. With about 10,400 employees, its daily oil and gas production in 17 countries is around 1.3 million BOE.
ENI (Ente Nazionale Indrocarburi)
ENI, a supermajor oil company from Italy was formed in 1953, and then it acquired AGIP, another Italian oil company, in 2003.
From its headquarters in Rome, ENI operates in 79 countries. The company employs more than 30 thousand people and it produces a combined 1.7 million BOE of oil and gas daily.
Balikpapan, located in East Kalimantan, is the most well known and interesting oil town in Indonesia, and possibly in the world. It is at the center of oil and gas exploration and production activities that have been taking place in East Kalimantan since 1897 when the first oil well was drilled in Balikpapan. It is also the battleground of two fierce battles during World War II. It is set to become even more well known with the announcement of the relocation of the capital city of Indonesia from Jakarta to East Kalimantan.
Here are the interesting facts about Balikpapan.
The First Oil Discovery At Balikpapan
Oil was discovered in Balikpapan in 1897 when Jacobus Hubertus Menten, a Dutch mining engineer observed oil seepages in the area. With the help from Sir Marcus Samuel from Shell Transport and Trading Ltd, they drilled the famous Well Mathilda B-1 on 10 February 1897. The well was drilled to 222 Meter and it flowed initially at 184 barrels per day. This oil discovery in Balikpapan took place 38 years after Sir Edwin Drake drilled the world’s first oil well in America.
This picture shows the Mathilda B-1, the first well drilled in Balikpapan. The picture was taken by Chaz Tumbelaka.
With the discovery, Jacobus Hubertus Menten and Sir Marcus Samuel formed Nederlandsch Indisch Industrie en Handel Maatschappij (NIIHM), and it continued to discover other oil fields away from Balikpapan. 10 February 1897 is considered the birth date of Balikpapan.
The Balikpapan Refinery
To process the crude oil from the surrounding area and to meet the needs for fuel, the oil refinery of Balikpapan was completed in 1922 by BPM (Bataafsche Petroleum Maatschappij) which was a subsidiary of Royal Dutch Shell. The Balikpapan refinery was damaged in 1942 when the Japanese army invaded Balikpapan. The refinery was controlled by the Japanese army in 1942-1945. BPM regained control of the refinery after the Allied forces ended the Japanese occupation of Balikpapan in 1945.
Several years later, Pertamina gained control of the refinery in 1949. The refinery has been expanded and upgraded several times to meet the increasing demand for fuel in the eastern part of Indonesia.
As one of the largest refineries in Indonesia, it is set to become even bigger. It is currently undergoing a large 4-billion-dollar expansion which will increase its processing capacity from 260,000 barrels per day to 360,000 barrels per day when it is completed in 2021. The refinery will have the capability to produce high-quality Euro V standard fuels.
The Discovery of Giant Oil and Gas Fields
Balikpapan experienced its biggest boom when several large international oil companies came to town after the production sharing contract scheme was introduced by Indonesia in 1966.
Balikpapan was the base of Union Oil of California (Unocal), Total and Roy M. Huffington Incorporated (Huffco) during their exploration and production operations in East Kalimantan where they discovered several giant oil and gas fields.
Pertamina has a huge presence in Balikpapan since 1949 when it took over the oilfields and the refinery which were previously operated by BPM (Bataafsche Petroleum Maatschappij), a subsidiary of Royal Dutch Shell.
Operated from Balikpapan, Unocal in partnership with Japex discovered the giant offshore oil field of Attaka in 1970. It also discovered the offshore Sepinggan field and the Yakin field both of which are clearly visible from the hills at Balikpapan. In 1996, Unocal discovered and developed the West Seno field which is the first deepwater oil field in Indonesia.
Total with its partner, Inpex, acquired the Mahakam Block in 1966. They discovered several giant offshore oil and gas fields: Handil, Peciko, Tambora, Bekapai, South Mahakam, Sisi-Nubi, and Tunu.
Huffco discovered the giant onshore Badak gas field in 1970 in East Kalimantan. The discovery of the giant Badak gas field had a huge influence on the course of oil and gas development in East Kalimantan. It prompted Huffco and Pertamina of Indonesia to build an LNG plant making it possible to export the gas.
Besides the Badak field, Huffco subsequently discovered the Nilam, Pamaguan, Semberah, Mutiara, Beras, and Lempake fields.
Huffco later became known as VICO Indonesia (Virginia Indonesia Company) in 1990 after Mr. Roy M. Huffinton sold the company.
After the introduction of the production sharing contract scheme (PSC) in 1966, and with the discovery of several giant oil and fields in East Kalimantan and in other parts of Indonesia, crude oil production in Indonesia increased from 500,000 BOPD to 1,650,000 BOPD at its peak in 1977.
The Badak LNG Plant in Bontang
The LNG plant known as the Badak LNG was completed in 1977. Located in Bontang, besides processing the gas produced by Huffco from the Badak field, the Badak LNG plant also processes gas produced from the fields operated by Unocal and Total located in East Kalimantan. Up until the completion of the LNG plant, most of the associated gas produced by Unocal and Total were flared.
The Badak LNG plant initially comprised of two trains. Over the years, with new field discoveries, six additional trains were constructed. With 22.5 million tons per year LNG production capacity, it is one of the largest LNG plants in the world.
As of 16 September 2019, Badak LNG has delivered 9445 LNG cargoes to countries such as Japan, Taiwan, Korea, China, the USA, Russia, and India.
The Fierce Battlefield during World War II Twice
Being rich in oil and having a refinery, Balikpapan was so vital that it became a battlefield twice during World War II.
The Battle of Balikpapan in 1942
During World War II, in order to control the supply of fuel, Japan invaded Balikpapan in 1942. The Dutch garrison resisted the invasion but eventually was defeated by the much bigger Japanese forces. The refinery was partially destroyed during the invasion. Japanese forces took control of Balikpapan, oil production and the refinery from 1942 to 1945.
The Battle of Balikpapan in 1945
To regain control of Balikpapan and the oil supply, the Allied forces directed by General Douglas McArthur and spearheaded by the Australian 7th Division invaded Balikpapan on 25 June 1945. After 3 weeks of fierce fighting and heavy bombing, the Japanese soldiers in Balikpapan finally surrendered on 21 July 1945. Many Japanese soldiers fought to the end in the battle. There is a Japanese cemetery hidden among the hills in Balikpapan.
The Coal Boom of Balikpapan in the 1990s
Balikpapan experienced another economic boom when it became the center of the booming coal production in East Kalimantan beginning in the 1990s.
The Balikpapan Coal Terminal completed in 1995 is one of the biggest coal terminals in Indonesia. It has a throughput capacity of 15 million tons of coal annually.
Will Balikpapan continue to boom?
Since the discovery of the first oil well in Balikpapan in 1897, Balikpapan has seen several booms in the last 120 years. It has grown from a small fishing village to become a city with a population of 850,000 today.
On 26 August 2019, the President of Indonesia, Joko Widodo, announced that Indonesia will relocate its capital city from Jakarta to East Kalimantan. As the main gateway to East Kalimantan, Balikpapan will be the center of activities during the construction of a new capital of Indonesia. So, Balikpapan will likely continue to boom.
Finally, Balikpapan indeed is a very interesting town. As an oil and coal mining town, it has been voted several times as the most liveable city in Indonesia. Thousands of oil people from around the world have worked and lived here. Many children of international expatriates and Indonesian oil professionals from Java, Sumatera and other parts of Indonesia grew up in Balikpapan. Most of them have fond memories of Balikpapan.
Many sons and daughters of the first-generation Indonesian oil professionals follow the footsteps of their parents to work for oil companies in Balikpapan. There is a saying in Balikpapan whoever has drunk the water of Balikpapan will surely return. The writer of this article lived and worked for Unocal in Balikpapan from 1976 to 1980, and he has returned to visit this interesting place many times.
The Sarulla power plant with a total capacity of 330 MW is the largest geothermal power plant in Indonesia and also one of the 10 largest geothermal power plants in the world.
The Sarulla power plant has three combined-cycle units. Construction of the power plant started in May 2014 and the first unit named Silangkitang was completed in March 2017. Units Namora I-Langit 1 and Namora I-Langit 2 started operation in October 2017 and May 2018 respectively.
Located in North Sumatera of Indonesia, the power plant is operated by Sarulla Operations Ltd, a consortium consisting of Medco Energi, Itochu, Kyushu Electric Power Company, Inpex and Ormat with a total investment of US $1.7 billion.
The generated electricity is distributed by PLN, Perusahaan Listrik Negara, which is the state-owned electricity company of Indonesia.
This project demonstrates the commitment of the Indonesian government to increase energy production from renewable resources, especially from its huge geothermal potential. Indonesia has 40% of the world’s geothermal resources. The Indonesia government said three new geothermal power plants will start to operate this year. They are the 55 MW PLTP Lumut Balai, 40 MW PLTP Sorik Marapi and the 5 MW PLTP Sokoria.
The total installed geothermal power in the world in 2018 is 14,600 MW according to ThinkGeoEnergy. The five countries producing more than one Giga Watt (GW) of geothermal power are:
The USA – 3639 MW
Indonesia – 1948 MW
The Philippines – 1868 MW
Turkey – 1347 MW
New Zealand – 1005 MW
Here is a little bit of an interesting history about the Sarulla project. The Sarulla geothermal resource was originally explored and discovered by Unocal North Sumatera Geothermal. Unocal’s plan to construct the first power plant was suspended during the financial crisis in 1998.