GEO ExPro

Borneo’s Petroleum Plays

Borneo, the world’s third largest island, has lush tropical forests, rich wildlife, coral reefs, and fascinating tribal cultures. It also has classical petroleum basins characterized by vast deltaic sediments and carbonate platforms which continue to make this region an attractive source of energy for the populous Asian markets.
This article appeared in Vol. 9, No. 4 - 2012

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A sketch map showing the main tectonic features of Borneo. Tectonic lineaments and faults shown on the map are: Balabac Fault (Bb. F.); Jerudong Line (Jd. L.), Baram Line (Br. L.), Balingian Line (Bg. L.), Lupar Line (Lp. L.), Paternoser Fault (Pn. F.), Adang Fault (Ad. F.), Sangkulirang Fault (Sn. F.), and Maratua Fault (Mt. F.). Major deltas are: Sabah (Sb), Baram (Br), Balingian (Bg), Rajang (Rj, paleodelta), Mahakam (Mh), Tarakan (Tk), and Sandakan (Sn). Source: Rasoul Sorkhabi (2012). Located in equatorial South East Asia, Borneo is home to ecologically rich rainforests. It is administered by three countries: Kalimantan (72.9% of Borneo) belongs to Indonesia; Sarawak (16.8%) and Sabah, also called North West Borneo (9.8%), are parts of the Malaysian Federation (Eastern Malaysia); and Brunei (0.8%) is an independent kingdom, its Sultanate having ruled over much of Sarawak and Sabah during the 16th to mid-19th centuries before it gradually lost these territories to Great Britain. Brunei itself was a British protectorate from 1888 to 1984. Source: Rasoul Sorkhabi/Base map: NOAA Mt. Kinabalu (4,101 m), located in Sabah, is the highest summit on Borneo and a very young granite pluton of late Miocene age. Source: Layla Sousou
Oil seeps and anticline structures in the near-shore sedimentary rocks of Borneo drew the attention of British and Dutch oilmen in the late 19th century. In 1897, an 84m-deep well in the Mahakam delta (Kutei Basin) hit 32° API oil in the Sanga Sanga oil field, and consequently a small refinery was built in Balikpapan, then a fishing village and today a large port town in East Kalimantan. The second oil discovery in this basin was the Samboja field (with heavier oil of 21° API at a depth of 110m) in 1909. Dutch oilmen went on to discover the Pamusian field in 1901 on Tarakan Island, which amazingly remains to this day the largest oil field in the Tarakan Basin, having already delivered 193 MMbo, or 60% of the total volume of oil produced from the entire basin. The second discovery in Tarakan was the Bunyu field in 1929, which has produced 83 MMbo.

On the western side of Borneo, the first oil discovery was Shell’s Miri field in Sarawak in 1910, which produced about 80 MMbo before it was abandoned in 1972 (see Geo Expro Vol. 7, No. 2). Three years prior to this, Shell and Royal Dutch oil companies had merged into one company, which established local subsidiaries, Sarawak Oil Field (now called Sarawak Shell) in 1910 and British Malayan Petroleum Co. (today’s Brunei Shell Petroleum) in 1922. The latter discovered the Seria oil field onshore Brunei in 1929, which in 1991 passed its billionth barrel, and continues producing oil. These early discoveries put Borneo on the world’s petroleum map.

Tectonics and Basin Evolution

To better understand the hydrocarbon riches of Borneo, we need to consider the formation of its sedimentary basins within the tectonic framework of South East Asia.

Present-day Borneo is under remote tectonic stresses from nearby plates. On the south, the Australian oceanic plate is subducting beneath Sumatra-Java islands, and on the east, the Philippine Sea plate is subducting beneath the Philippines. The region between the Philippines and Borneo is occupied by three relatively smaller ocean plates: Celebes Sea, Sulu Sea, and South China Sea, all of which opened in Cenozoic times, and are presently subducting beneath the Philippine islands.

Although Borneo is not an earthquake-volcanic country today, it has experienced a violent tectonic history in the past. The south-eastern part is a continental block made up of Paleozoic rocks intruded by Cretaceous igneous rocks, and is actually part of Sundaland, the continental core of South East Asia that spans the region from Vietnam all the way to Sumatra. During the Paleocene, a continental fragment, the Luconia block, drifted away from China and toward Borneo. The intervening oceanic floor between Borneo and Luconia was subducted beneath Borneo, and in the Late Eocene Luconia collided with Borneo. This subduction, accretion and collision created the Rajang Mountains that form a topographic high between Kalimantan and Sarawak.

In the Eocene, the eastern margin of Borneo underwent different tectonic changes. Coeval with the opening of the Celebes Sea, the continental crust under the Mahakam- Makassar region was stretched forming rift basins filled with sandstone and shale. In the Miocene, Borneo experienced regional uplift, terminating carbonate sedimentation (which is now mainly restricted to platforms offshore Borneo), and large deltaic systems-dominated sedimentation around Borneo. Growth faults, turbidity currents, shale diapirs, and deepwater toe-thrusts thus characterize the Neogene structures off the west and east coasts of Borneo. During the Pliocene, tectonic compression further uplifted Borneo’s coasts.

Shell geologist Harry Doust has suggested a generalized sedimentary facies model for the Cenozoic rift basins in South East Asia in which four different phases are recognized: (1) syn-rift phase (Eocene-Oligocene) associated with development of grabens and deposition of fluvial and lacustrine sediments; (2) late syn-rift phase (Late Oligocene-Early Miocene) characterized by waning graben subsidence and transgression (backstepping) of deltaic deposits; (3) early post-rift (Early to Middle Miocene) marked by tectonic quiescence and shallow marine sediments covering the rift basins; and (4) late post-rift phase (Middle Miocene-Pleistocene) which corresponds to tectonic inversion and folding and the transgression of deltaic systems. Of these, the first phase has mainly oil-prone source rocks (with kerogen types I and II), while the other phases contain both oil and gas sources (kerogen types II and III).

Exploration Goes Offshore

A simplified map showing the distribution of major sedimentary basins onshore and offshore Borneo. (Sarawak-Sabah basins based on Shell and Petronas; Kalimantan on Unocal and Pertamina; carbonates from Wilson et al., 1999, Journal of Asian Earth Science, 17: 183–201; coal mines from Wilson and Moss, 1999, Paleo3, 145: 303–337.) In its 2010 assessment of the world’s undiscovered petroleum resources, USGS estimated (95% probability) 2,116 MMbo for the Baram-Brunei-Sabah Basins, 80 MMbo for Balingian, 58 MMbo for Sandakan, 136 MMbo for Tarakan, 1,462 MMbo for Kutei, and 20 Mmbo for Barito. Of this total of 3,872 MMbo yet-to-find oil resources, 83% are in deepwater basins. Similarly, USGS estimates 134 Tcf of undiscovered gas resources (both associated and free gas) in Borneo’s basins as follows: Kutei (46.0 Tcf), Greater Sarawak (38.1 Tcf), Baram-Brunei-Sabah (26.4 Tcf), Tarakan (12.7 Tcf), Sandakan (8.7 Tcf), and Barito (2.9 Tcf). Source: Rasoul Sorkhabi (2012) After the discovery of the Miri and Seria fields, Shell continued exploring onshore Sarawak and Brunei, but despite drilling more than 90 wells in over forty years no new onshore field was discovered. In 1955, Shell started exploring the Sarawak shelf and in 1962 it discovered the Temana oil and gas field in the offshore Balingian Basin with 41° API light crude, thus adding a new petroleum basin to Borneo’s portfolio, although production from Temana only started in 1979. The offshore Baram delta and nearby Brunei still remained Shell’s focus areas. By the end of the 1960s, six fields (Baram, Lutong West, Bakau, Baronia, Betty, and Beryl) offshore Baram and three fields (Ampa, SW Ampa, and Fairley) offshore Brunei had been discovered.

In the 70s and early 80s exploration efforts on the western margin of Borneo ensued partly because of high oil prices caused by the 1973 and 1979 oil crises. Malaysia’s national oil company Petronas, founded in 1974, joined these oil ventures and a number of new offshore discoveries were made not only in the Baram and Balingian Basins but also offshore Sabah (notably, Tembungo, Barton, Erb West, Furious South, Saint Joseph, Ketam, and Lokan). All these, like their predecessor onshore fields, were in deltaic sandstone reservoirs of Miocene-Pliocene age.

Another significant development was the discovery of major gas fields in the carbonate reservoirs of the Luconia platform offshore Sarawak. This play began with the discovery of F-6-1X, F-13-1X, and E-8-1x in 1969, continued through the 1970s and reached its climax in 1980 when five gas fields were discovered in that year alone.

The second wave of petroleum exploration on the eastern side of Borneo was most successful in the Kutei Basin where Unocal hit the first offshore oil field, Attaka, in 1970. Huffco, which initially operated small old fields in Kalimantan but discovered the onshore Badak gas field in 1971, and Total were other major players in that region. Unlike Sarawak, Brunei and Sabah, oil and gas discoveries in the Mahakam delta were both onshore and offshore, including Bekapai (1972), Handil, Nilam, Pamaguan, Semberah and Tamboram (1974), Tunu (1977), and Kerendan and Mutiara (1982).

Deepwater Petroleum: The Third Wave

Typical Malaysian stilt houses in Borneo. Source: Layla Sousou As in many other regions, since the late 1990s deepwater basins have become the most significant plays in Borneo, with Unocal (acquired by Chevron in 2005) performing a pioneering role. In 1999, it was operator in five deepwater blocks in Kutei under Indonesia’s PSCs – East Kalimantan, Makassar Strait, Sesulu, Rapak and Ganal. What motivated Unocal to enter these plays was its discovery of oil and gas in Pliocene sands at West Seno (in 1996 and Merah Besar (1997), both located in the Makassar PSC. In 1999, Unocal began intensive exploration of the nearby Rapak and Ganal blocks. Janaka North-1, drilled to a depth of 2,934m in water depths of 1,316m in Rapak (then the deepest well drilled anywhere in Indonesia), encountered oil in high quality reservoirs and in thin-bedded sandstones. After this breakthrough, the Ranggas (oil and gas), Bangka and Gehem (gas) fields were discovered in Rapak.

In the Ganal PSC in 1998, Unocal initially focused on Pliocene targets, probably thinking that Miocene sands could not be deposited that far from the shore. After shooting 2D seismic over Ganal, three wells were drilled into Pliocene sands draped over structural highs, but all were dry. In late 1999, Unocal decided to drill deeper into the Upper Miocene sands in the same block and found Gandang, followed within three years by four other gas fields – Gendalo, Gada, Gula and Maha. With these successes, Unocal covered the entire 5,050 km2 Ganal PSC, in water depths of 1,829m, with 3D imaging.

Unocal’s deepwater successes drew other companies to the Makassar Strait, either teaming with Unocal, like Lasmo, or entering on their own. In 2002 Amerada Hess discovered the Halimun and Papandayan gas fields on the south-eastern edge of the Mahakam Delta. After acquiring Lasmo in 2001, Eni entered offshore Kalimantan and in 2010 announced the discovery of Jangkirk, with recoverable reserves of 1.4 Tcf, in the Muara Bakau deepwater block. In 2011, Eni was awarded the 2,432 km2 North Ganal PSC offshore Kutei.

On the eastern side of Borneo, Shell’s discoveries of Kebbangan (1994) and Kamunsu (2000) gas fields offshore Sabah were pioneering steps. What particularly gave momentum to deepwater ventures in Sabah was Kikeh-1, drilled in 2002 by Murphy (Petronas 20%) in SB-K Block in 1,340m of water. Murphy entered Malaysia’s offshore blocks in 1999, and drilled the field after doing methodic homework. Kikeh is estimated to contain 536 MMboe and came onstream in 2007. Other notable deepwater discoveries offshore Sabah include Gumust-Kakap (Shell, 2003-2005), Malikai (Shell, 2004), Jangas (Murphy, 2005), Ubah Crest (Shell, 2005), Pisangan (Shell, 2005), and Wakid (Petronas, 2011).

In 2009, Newfield discovered Paus (10 MMbo and 12 Bcfg) in deepwater Block 2C offshore Sarawak, and in 2011, Petronas found two major carbonate gas fields off the coast of Sarawak. NC8SW, with over 450 Bcfg recoverable in a 440m column, was drilled September 2011 to a TD of 3,853m, and Kasawari (estimated to hold up to 3 Tcfg recoverable, out of the total gas-in-place of 5 Tcf in a 1,000m continuous column) was drilled November 2011 some 17 km north of NC8SW.

News from Brunei is also encouraging, especially after resolving in 2009 its 20-year-old offshore border issues with neighboring Malaysia. In 2011, Brunei Shell found the Gernoggong oil field about 100 km offshore. This year, Total announced the discovery of two hydrocarbon fields in water depths of more than 1,000m in CA-1 block.

Future Prospects

A view of Upper Miocene deltaic sandstone and interbedded shale (Miri Formation) cut by a normal fault. Neogene deltaic sediments predominate in the sedimentary record and petroleum reservoirs of Borneo. Source: Rasoul Sorkhabi Borneo’s deepwater basins are an active playground for oil and gas exploration with promising plays. 3D geophysical imaging and geological understanding of these basins, especially in terms of the origin of hydrocarbon source rocks, distribution of sand channels and trap integrity of toe-thrust structures, will help increase the success of exploration.

Borneo’s near-shore and shallow-water basins are often categorized as mature, but they still hold surprises. In 2007, Total’s well ML-4 drilled offshore Brunei in 62m water depth to a total depth of 5,227m and hit gas, and in 2009 Anadarko discovered 40m of oil and gas in Badik-1 in only 70m of water offshore Tarakan. In 2011 in shallow waters off the west coast of Sabah, Petronas discovered a gas field estimated to contain 500 Bcfg in place. Interestingly, this discovery was made in the Samarang-Asam Paya block, in which Petronas also drilled an oil discovery well, Alab-1, in water depths of only 54m in 2000. A better assessment of Borneo’s shallow-water Neogene clastic reservoirs compartmentalized by growth faults will add new marginal reserves to these ‘mature’ basins.

Miocene-Pliocene deltaic plays have so far accounted for the bulk of oil and gas discoveries in the region. Deeper pre-Middle Miocene plays of Borneo remain less explored, and these may contain gas resources in tight reservoir rocks such as shale gas. Being a densely forested region for tens of millions of years, Borneo is also noted for its coal-bed methane (CBM) resources. Indonesia’s Ministry of Energy and Mineral Resources has estimated CBM resources of 101.6 Tcf for Barito, 80.4 Tcf for Kutei, 25.9 Tcf for Berau-Indonesian Tarakan, and 3.0 Tcf for Pasir and Asem Asem Basins. With more gas discoveries and production in Borneo, construction of LNG plants will become a necessity.

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