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ABSTRACT: Exploration and Development Prospects in the Pacific Rim Area

Nahum Schneidermann

The Pacific Rim area discussed in this presentation includes basins flanking the Pacific Ocean in Asia (Sakhalin of USSR, various Chinese basins, Indochina, Malaysia, Indonesia), Oceania, and Australia and the coastal zones of the Americas. During the presentation, we will review exploration and development prospects for oil and gas using proven and potential reserves figures available in the public domain.

Exploration and development projects on the western coast of USA and Canada are at a standstill, held hostage to environmental concerns. Exploration in the coastal zones of Central and South America has been relatively unsuccessful. In the southwest Pacific, Australia is the major producer of oil (about 490 Mbbl/d), with larger reserves of gas (between 16 and 20 tcf proven) being under development.

Indonesia is by far the largest producer of oil in the Pacific Rim area, with about 1.15 million bbl/d. However, much of its production approaches maturity, necessitating extensive secondary and tertiary recovery projects such as the Duri steamflood. Malaysia with 540 Mbbl/d and Brunei with 138 Mbbl/d are also producing at peak offtake. Opening of Burma and Vietnam to international exploration offers opportunities for further development projects.

Exploration efforts offshore PRC resulted, unfortunately, in only modest size discoveries. It now appears that the reserves of the Pearl River Mouth basin will not be sufficient to offset the expected production declines (from 2.733 million bbl/d) derived mainly from the mature, eastern China onshore basins of Songliao and Bohai. The potentially large reserves in the western Chinese basins will require very high development and transportation expenses. In easternmost Siberia, the Sakhalin project appears to be the furthest on the road to economical development.

The oil potential of the Pacific Rim basins is limited to the few petroliferous basins in the western central Pacific area. Many giant oil accumulations in this area are at or approaching peak offtake, with production declines looming on the near horizon. Newly discovered oil reserves of any significant proportion enter the development phase at the earliest possible date. On the other hand, gas reserves are very abundant in many zones of the Pacific in spite of the fact that our exploration efforts have been devoted primarily to finding oil. In balance, there is far more gas than the region's domestic markets can presently absorb. As a result gas discoveries are queuing up awaiting market development. In fact, the only major projects being initiated are those that have been strongly e couraged by host governments through relaxation of terms to improve economic returns to industry, often in conjunction with government incentives to encourage early development.

AAPG Search and Discovery Article #90097©1990 Fifth Circum-Pacific Energy and Mineral Resources Conference, Honolulu, Hawaii, July 29-August 3, 1990