Talisman’s Indonesian assets include onshore interests at Corridor PSC, Ogan Komering and Jambi Merang as well as offshore interests in Southeast Sumatra, Offshore Northwest Java, Tangguh and extensive exploration acreage at Pasangkayu, Sageri, South Sageri, Sadang, South Mandar and Andaman III. Talisman also has an indirect 6% interest in the Grissik to Duri pipeline and the Grissik to Singapore pipeline.
Talisman has a 36% non-operated interest in the Corridor PSC and field production facilities. There are three major buyers of Corridor gas. Gas production from Corridor began in 1998 pursuant to a gas to oil exchange agreement with Caltex at the Duri oilfield. These volumes were increased pursuant to another gas to oil exchange agreement signed with Caltex in 2000. Gas sales commenced in September 2003 to Gas Supply Pte. Ltd., located in Singapore, under the terms of a 20-year gas sles agreement. The sale of gas to PT Perusahaan Gas Negara (Persero), Tbk., made pursuant to a 17-year gas sales agreement, began at 50 mmcf/d gross sales gas from Corridor in 2007 and averaged 297 mmcf/d gross sales gas in 2010. In August 2010, the two gas to oil exchange agreements with Caltex were converted to agreements whereby the gas is now sold for cash consideration, with approximately an additional 500 bcf added to the 2000 agreement.
In 2010, production from the Corridor PSC was 61,300 boe/d, the highest level since this asset has been in operation. Corridor production accounted for approximately 51% of Talisman’s Southeast Asia production. As a result of testing conducted by the operator in the Suban field, the processing capacity of these facilities increased from 700 mmcf/d to 735 mmcf/d sales gas. To maintain the ability to supply existing Corridor customers, the Company approved projects to install gas compression in the Dayung field and increase the high CO2 processing capacity of the Grissik Central Gas Plant.
In the Ogan Komering JOB Block, Talisman commenced a 37-well infill program, which will be completed over the next three years. Drilling results from the nine wells drilled in 2010 are meeting expectations.
Talisman’s share of production from the Tangguh LNG project contributed 23 mmcf/d in 2010. At year-end 2010, Tangguh was operating at 85% nameplate capacity. After planned LNG train maintenance during the first half of 2011, the effective capacity is expected to reach 95% of nameplate capacity.
The Jambi Merang project is on schedule for mid-2011 startup. Four wells have been drilled and completed, with results exceeding pre-drill expectations. Three new gas sales agreements were signed in November 2010.
In Indonesia, Talisman participated in two unsuccessful exploration wells in 2010; 28 development wells were also drilled and completed in 2010.
The Company’s 2011 activities in Indonesia will focus primarily on the Corridor PSC. Talisman plans to participate in drilling four development wells in Corridor in 2011. The process to sanction Suban Phase 3 was initiated in 2008 and will continue in 2011. Talisman plans to participate in one exploration well in Sageri and 44 development gas and oil wells in 2011.
