Indonesia is a prolific oil and gas province in which more than 23 BBO and 150 TCFG of reserves have been discovered. Most of the hydrocarbons originate from and have been trapped in Tertiary rocks in western Indonesian basins on and offshore of Java, Sumatra and Kalimantan (Figure 1). Throughout the 20th century, explorers searched less successfully for major accumulations in eastern Indonesia. This eastern search was finally rewarded in 1994 when Atlantic Richfield Company (known as ARCO) discovered a super-giant natural gas accumulation in pre-Tertiary rocks in the Bintuni Basin of Papua, which was called Irian Jaya at that time.

The ARCO discovery spanned Paleocene through Jurassic formations below a producing Miocene oil field called Wiriagar. The exploratory drilling of the pre-Miocene stratigraphy was justified largely by geochemistry, which showed that the oil in the field was Jurassic despite flowing from a Miocene limestone reservoir. Analysis of pressures in the discovery well indicated that the height of the gas column exceeded 2000 feet, making the gas accumulation potentially large enough to justify construction of a liquefied natural gas (LNG) plant. From 1994 to 1998, ARCO farmed into adjacent acreage containing the majority of the discovery’s hydrocarbons, improved commercial terms through negotiations with the Indonesian government, appraised the initial well, identified and discovered two nearby gas fields, shot an extensive 3D onshore and offshore seismic program, and worked with an engineering firm to certify 24 trillion cubic feet of natural gas as reserves (14.4 certified as proved; the remainder as probable and possible). These reserves are the basis for what the Indonesian government designated in 1997 as the Tangguh LNG Project. Tangguh was the third largest discovery in the history of ARCO, exceeded only by the Prudhoe Bay and Kuparuk River Fields found in the 1960s on the North Slope of Alaska. Tangguh is also the first major pre-Tertiary hydrocarbon discovery in the history of oil and gas exploration in Indonesia.

The discovery and appraisal of Tangguh involved technical and commercial analyses, insights, and decisions whose interplay is a fascinating case study in how a modern, multidisciplinary,

Figure 1. Location Map of Tangguh in Papua New Guinea.

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globally dispersed exploration team operates (Figure 2). Numerous individual initiatives including petroleum geochemistry, drilling cost reduction, government relations, reservoir pressure analysis, negotiating strategy, porosity prediction and the like turned out in hindsight to be crucial in their accuracy and timing to keeping the project technically viable and commercially attractive. Since Tangguh is so recent, the thoughts and actions of the involved individuals and the linkage and details of successive events can be and have been precisely recorded. This talk will tell the story of the exploration team that discovered Tangguh.

Figure 2. Petroleum system of Tangguh field area.

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