Santos Ltd and its Japanese and Malaysian partners have hit oil off the coast of Malaysia.
In a filing to the Australian Stock Exchange, the Australian oil and gas company said it has made a ‘significant’ oil discovery at the Bestari-1 exploration well, in Deepwater Block R offshore from Sarawak, Malaysia.
According to the filing, the well hit 67 metres of high-quality oil at subsea depths of between 1,860 and 2,702 metres. The multiple oil-bearing sand packages are of good porosity and permeability, Santos has said, and the samples recovered indicate 27-30 degree API Oil with no HS2 and very little C02.
John Anderson, Santos’s vice president, cautioned that there is still a lot of work to be done before recoverable volumes can be determined. However, he also commented that the large structural closure has the potential to support ‘significant column heights’. The company is now planning further drilling to evaluate the discovery.
Bestari-1 is one of six explorations wells Santos planned for 2015, having cut its capital spending for the year by 25% in reaction to 2014’s oil price crash.
Block R is operated by Santos’s Japanese partner, JX Nippon, and is located in waters 100 to 1,400 metres deep. The block neighbours other oil discoveries, including the Kikeh field, where production started in 2007, five years after discovery.
Santos bought a 20% share in the block from JX Nippon and its Japanese partner, Inpex Corp, in January this year. Malaysia’s PETRONAS owns a 25% interest in the block.