Talisman holds a 41% operated interest in Block PM-3 CAA between Malaysia and Vietnam and associated production facilities. In addition, Talisman holds a 33% interest in Block 46-Cai Nuoc adjacent to PM-3 CAA and a 60% interest in each of Block PM-305 and Block PM-314. In Block PM-3 CAA, Talisman is progressing developments referred to as the ‘‘Southern Fields’’ and the ‘‘Northern Fields’’. Talisman also holds a 70% working interest in two offshore Sabah blocks which were awarded in 2009.
In 2010, production in Malaysia averaged 37,300 boe/d, which accounted for 31% of Talisman’s total Southeast Asia production. One exploration and one appraisal well and ten oil and gas development wells were drilled and completed in Malaysia in 2010.
The Southern Fields Incremental Oil Recovery (‘‘IOR’’) Phase 1 drilling program was completed, resulting in four oil development and two water injection wells in 2010. Phase 1 of the IOR scheme has met expectations, adding gross volumes of 6,300 boe/d (2,600 boe/d net to Talisman) for the year.
Northern Fields oil and gas production averaged 49,500 bbls/d (20,500 bbls/d net to Talisman). Six development wells were drilled and completed in 2010. In an effort to meet high gas demand, a parallel export compressor was installed in August 2010, resulting in a production gain of 40 mmcf/d sales gas at minimal cost. In 2009, some deeper zones in Northern Fields were plugged to alleviate the problem of higher mercury levels in gas and condensate, pending the fabrication and installation of a mercury removal facility. A Mercury Removal Unit was sanctioned as a mitigation measure in mid-2009 with commissioning in early 2011. In 2011, Talisman plans to drill five development wells and one injector well in 2011, of which four wells will be drilled in the Northern Fields and the other two in Southern Fields.
