First presence of the Group in Brunei
Elf Aquitaine signed the Petroleum Mining Agreement
The first pioneers arrived in Brunei in Janury 1987 to the Sultanate with the challenging task of establishing the subsidiary. Officially the success story, started with the signing of the Petroleum Mining Agreement (PMA) with the Goverrment of Brunei in November 23, 1989 to explore for hydrocarbons ln a specific part of the Brunei territory called Block B. This block, originally covering an area of 1572 km2, is in fact delimited by an encrage located 50 km offshore where Total can drill wells and acquire seismic information to explore the geological formations below the seabed. The mission was not only to find but also to then produce and sell those Block B hydrocarbons.
Acquisition to discovery
The first group to arrive in Bandar in January 1987 consisted of a team of only five people. However, within less than three years, they managed to establish a successful Elf Aquitaine subsidiary in South-East Asia. It was a real human and technical achievement. On November 23rd 1989, the French company signed the Petroleum Mining Agreement for the next thirty years; a very intense period started and this appraisal phase was going to be full of surprises.
"You will be a small team, insisted the office in Paris,” recalled Maurice Comtet, the first head of the subsidiary. “Everything went so fast that we had not been able to meet beforehand. So we all introduced ourselves in January 1987 at the boarding gate before taking-off from Paris! Present that day, accompanying Maurice Comtet, were Jean-Pierre Hurel, responsible for drilling, André Mariotte, chief of exploration, Jean Choignard, geologist and Daniel Jouhet, who was responsible for finance and administration.”
Elf Aquitaine had been surveying Brunei for a couple of years. It took a few months of negotiations with a small local company, Jasra Private Ltd (Jaspet) to finalise the farm out to Elf and the formal assignment was executed in December 1986. In 1987, the French company was registered under the Brunei Company Act.
Arriving in Bandar, the first task for this brand new team was to set up a functional subsidiary. Daniel Jouhet explained, " The day after we arrived we went to visit the offices . The assignment was to set up a small but solid base, since we had no idea of how long we would be staying!” But the first thing was to gain the confidence of our partners and to recruit staff. Adnan Salleh started on December, 3rd 1987 as an Assistant Draftsman in Exploration Department. “Back then we were doing our drawings manually and we had to share one computer!” he recalled.
Far away from the office, somewhere offshore in the Bruneain waters, part of the team had to prepare the future drilling campaign. “We already knew, before starting that it was going to be technically very challenging,” said Marc Bourdat, Head of Geological Operations. On October 4th 1989, Maharaja Lela-1 discovered gas bearing reservoirs in the North MLJ panel. Finally! After long months of negotiations, Maurice Comtet managed to enter into a new Petroleum Mining Agreement. Signed on the November 23rd 1989 in Paris, it was the birth certificate of Block B. It launched its official exploration.
With the PMA finally signed, Elf Aquitaine Offshore Asia could start a new chapter of its short life: the appraisal phase consisting of testing more wells. “It was such an intense stage,” said Dominique Paret, the new General Manager appointed in 1991, “Every day brought its surprises and a more serious exploration could start. We were all hanging on for the results and I remember the electric atmosphere in the office. We had the support from our headquarters in Paris and several representatives who were as enthusiastic as we were to make commercial discoveries, visited us a couple of times.”
Christopher Hollis, the Financial Director, remembered that at the office, the transition from manual to computerisation was also happening and for some of the employees this was a big deal. Offshore, wells were also being tested very regularly. During those years, the aim was still to find oil but this changed when Jean-Louis Jouvet, Head of Geosciences at headquarters decided to switch focus. He pushed the Bruneian subsidiary to concentrate on gas discoveries and was the first to understand the need to develop gas production in Brunei. In May 1992, a well was successfully drilled, ML2. A new era of development studies started.
From studies to investment decision
So far, nothing had been gained for French company. The appraisal campaign scored some points but a more difficult period was ahead: the commercial negotiations. This was finally concluded with the signing of the Gas Supply Agreement, the real start of the development phase. This was confirmation that Elf could settle permanently in the area.
The turning point of the Gas Supply Agreement
In the spring of 1992, discoveries were made and Elf fought to transform this small exploration subsidiary into a production facility. A renegotiation of the PMA was nevertheless signed in October 1993 to validate certain clauses. Six years after the arrival of the first team, the failover development from just oil to a more viable development with the addition of gas reserves marked a turning point and so the winds were once again blowing in the affiliate. It was all about patience. A new Managing Director, Henri Bergasse was appointed and headquarters in Paris were extremely keen to get the company established in Brunei." Access to the BLNG plant was the non-negotiable condition required to draft a serious development plan.
How to make Block B viable was the main question. “I arrived in Brunei in 1993,” says Gilles Trican, Project Manager. “We studied all possibilities to develop the MLJ field, either as a stand-alone or a developing satellite connected to a Shell platform. But before all this, it was fundamental to prove the amount of our gas reserves in order to sign a potential Gas Supply Agreement. I focused much of my work on this and surprisingly, everything was certified in June 1996.” Once done, Elf had to start very tough negotiations regarding gas pricing for the gas sales to the BLNG plant. Arriving in Bandar, Yves Duteil, the Operations Manager was one of the key persons to deal with this matter. “My mission was to prove, based on specific studies if it was worth developing the MLJ field.” Three months later, the answer was positive and the team started to work on the development plan. Meanwhile at the office, new local staff like Khairani Hashim had to get used of the French culture. “We were still a small team,” explained Khairani who started in April 1995 as an accounts clerk. “I was seriously struggling with the language and had to take lessons. The atmosphere at the office was busy but good.” For the annual dinner in December 1995, a cruise was organised on the river and welcomed all of the employees of the affiliate. In parallel, it was time to start working on the Field Development Plan (FDP). To get access to the liquefaction plant, many meetings were held with BLNG some resulting in very heated exchanges between the French Elf and the Dutch Shell personnel, as BLNG were not eager to share their liquefaction plant. Fauziah Sauni, Fadzilla Abdul Rahman and Jean de Zilva, all three assistants also recalled those overwhelming times and the long evenings spent at the office finalising the preparation of all the necessary documents for the official signature. Thanks to the tenacity of the whole team, the Gas Supply Agreement was signed in April 1997. It paved the way for the massive expansion of the affiliate and its many achievements.
Development project and first production of Block B
This was a period of intensive work; in just two years a processing plant and offshore platforms were built allowing production to start. At that time, around 21 000 barrels of oil equivalent per day were being produced. As well as this, a charismatic leader asked everyone to play cricket; and a five century old Chinese shipwreck was discovered on the gas pipeline route. A true epic!
A Fascinating Age
In April 1997, the coast was clear for the French oil company. The government finally gave their consent to use the gas liquefaction plant. It took ten years to reach this agreement in order to successfully exploit Block B’s resources but it would only take two years to launch the offshore processing plant (OPP), two platforms and an 85 km pipeline to get production started for real. A stunning record! "We were a strong team and everyone was in place.” said Xavier Troussaut, Reservoir Engineer. “We were trusted; there was a real exigency and solidarity.” The arrival of a new General Manager, John Perry who was very determined to establish Elf Offshore Asia B.V in Brunei, as a well-known and successful operator, marked the beginning of a new era. His desire to create a real team spirit among the entire subsidiary contributed to the dynamism of those years.
There was no lack of challenges or surprises during that development time, but the most noteworthy was certainly the discovery of an old Chinese galleon on the route of the pipeline in May 1997. Straight away, John Perry recognised the value of this underwater encounter for the French Bruneian relationship. Things went pretty well and the excavation process started in May 1998. In the meantime on the island of Java, in Indonesia, where the future platforms were being built another drama was unfolding; a turbulent political climate forced a part of the team to evacuate the area by sea. In the end, all went well but there were many more sleepless nights for some of the managers. In 1998, the office resembled a beehive as there was always something going on. “One of my best memories,” recalled Siti Saodah Hj Mohd Salleh, the receptionist, “was the day that we boarded in a helicopter to visit MLJ1. It was my first time on a flight! We went straight to the platform located 20nm flight from there.”
After less than two years of exhausting work from everyone at the subsidiary, the Offshore Processing Plant (OPP) emitted its first flame on February 19th 1999! The gas was processed through the BLNG plant to be liquefied before being shipped to Korea and Japan. Production began slowly before reaching an average of 21,000 barrels of oil equivalent per day (data between June and December 1999). During the summer 1999, Total launched a successful takeover bid for Elf Aquitaine. For the next few years, the company was known as TotalFinaElf before being finally called Total. During this time, it was compulsory to change the terms of certain contracts that would allow the giant oil and gas French company to maximise production. The extension of “plateau” (level of peak oil or gas field production) was discussed as well as a potential unitisation with Petronas, as part of the field extended into Malaysia. It was only good news for the company and for the next couple of years, the future of the subsidiary seemed assured.
Outstanding production performance and a successful second exploration campaign.
From 2002 to 2007, the subsidiary enjoyed a period of success albeit with new challenges. Total in Brunei reached its cruising speed: OPP production broke records and the geosciences team identified significant potential for new discoveries. As a result of this, in 2004, a new exploration campaign was launched. After the seismic campaign, negotiations followed to ensure that a market was available for the new gas reserves that were expected to be discovered. Exploration drilling of MLJ2-06 in October 2007 was a success, and this opened new horizons within the MLJ South field.
When strong willpower pays off
In the autumn of 2002, the subsidiary was thriving once again! Pierre Desvoyes, the new General Manager who had a drilling background, and Patrick Fleury, the Operations Manager both focused on excellence in operations. It was now time to act; this was the beginning of a new phase of development! Block B had not yet revealed all of its treasures and when the drilling team started to work on developing the MLJ1-06 well in October 2002, unexpected discoveries were to come. The high productivity of the discovered reservoirs strengthened production for the following years.
In 2003, production levels were doing very well, records were even being achieved: 10.95million barrels of oil equivalent per year (Mboe). The Geosciences team anticipated that additional reserves could be found in the untapped geological compartments of Block B and so started a 3 D survey. This is when intense negotiations started with headquarters in Paris, as there was a reluctance to invest in such risky operations. Other questions dealt with by the GM were “Can we persuade Head Office that there is a possible market for the gas and would these reserves deserve investment?” The wilfulness of the GM and of the very determined geosciences team proved that both answers would be yes! Paris finally agreed to invest in this drilling campaign in July 2006. It was a real relief for everybody. For months some expatriate families were not really sure about their future in Brunei and every two or three months, a departure was planned. The permission to sign the drilling rig contract gave them peace of mind for the months ahead.
The atmosphere was really pleasant at the office. “Sharing Hari Raya one day, celebrating Chinese New Year at open houses another day; a bowling game, shrimps and chips across the border!” said Philippe Broulis, the Administration Manager. “I was part of other subsidiaries before and after Brunei where I was not so welcomed within the different communities!” Others kept memories of the Empire hotel holding piñata parties for all of the families. Those were simple moments that helped to alleviate the stress of the new exploration campaign that was about to take off. In 2006, a new record of 11,84 million barrels of oil equivalent (Mboe) was reached. The drilling campaign was being prepared and in February, when the new General Manager, Louis Heuze arrived in Bandar, he began very firm negotiations with BLNG as there was dissatisfaction with the gas supply prices. Without an answer from BLNG, he reduced production from 100% to 60% over a period of three days. After four days, BLNG agreed to revise their prices in a very substantial way and it gave more freedom to Total afterwards. On August 7th 2007, MLJ2-06 was the first well drilled to explore the Southern extension of this field that successfully discovered gas in one panel! When strong willpower pays off…
The appraisal of deep reservoirs and the launching of the second phase of development
The successful drilling of MLJ2-06 in 2006 opened the way for the first production from the deep reservoirs. In 2010, ML5 became the deepest well ever-drilled in Brunei Darussalam. In a way, this fundamentally changed the limited perspective on the subsidiary’s future and led to the extension of the contractual framework. These discoveries doubled the initial reserves! A real feat and an assurance that the French company would stay much longer in the Abode of Peace.
Twists and turns
Platform well MLJ2-06 was the first to explore the Southern extension of the field and this well was a great success so the affiliate could finally start making plans about its future. Time, however, was running out; the Gas Supply Agreement would expire in 2013 and the subsidiary had to find new reserves in order to renew it and to stay longer in Brunei. With the support of the General Manager, Louis Heuze, the enthusiasm and passion of the geosciences team played a fundamental part in convincing Paris to go further with the exploration campaign. In 2008, the subsidiary was very busy organising the Minister of Energy’s visit to Balikpapan (Indonesia). It took a lot of preparation including chartering a commercial flight to Balikpapan! It also included a great deal of coordination between TEP Brunei, TEP Indonesia and the Brunei government. “It was such a big event,” recalled Hjh Junidah Hj Mohamed. “I had to deal with all of the immigration paperwork. What an achievement!” Two years later, the same team organised the Minister of Energy’s trip to Paris.
Yves Grosjean was appointed as the new General Manager on 29 January 2010 and in August 2010, ML-5 exploration well discovered new gas bearing reservoirs. So far it remains the deepest successful production test in South-East Asia (5 350 meters). No other well in the region has proved to be as challenging! It paved the way for a new development phase. Meanwhile, TEPB started to work with Petroleum Brunei as its new partner in Block B (27,5% of the Joint Venture). After two years of studies, the Group Executive Committee (COMEX) in Paris approved the launch of the project to develop the Southern panels in February 14th 2012. The MLS South project could then start for real.
ML South development project and existing well and reservoir production performance gave birth to an elephant
Never take anything for granted in the oil and gas business: be ready for unexpected surprises because they can blow your mind. This it what happened with TEPB in Brunei. In 2012, Block B entered a new phase of development with the MLS project to develop the deeper and more challenging Southern panel reserves and increase production. The latest studies have revealed that the MLJ field would contain more hydrocarbon reserves than initially planned!
Beyond the promises
“We have already produced what the initial Field Development plan (FDP) was expecting us to!” said Pierre Temperville, Head of Finance, from 2009 to 2013. And we still have 25 more years of production ahead of us. It’s an unbelievable achievement.” The sanction of the MLS project also marked the starting point of a race against time; the first gas deliveries from MLS were planned to be made on April 1st 2015 and a new 12-slot unmanned wellhead platform called MLJ3 is being built partly in Brunei and Vietnam. In the oil and gas business, negotiations never stop: in December 2011 approval was given to extend the existing Petroleum Mining Agreement (PMA) through to November 22nd 2039. This extension has allowed TEPB to launch the new project with certain conditions mainly related to promoting local content. The initial Gas Supply Agreement (GSA) expired on March 31st 2013 and a new GSA was signed in December 2013 for a further 20 years (to 2033).
In the meantime, expatriate families continued to arrive from around the world with their children following the tradition of joining Jerudong International School (JIS), which provides a high level of education in English. The company calendar is also peppered with family days, team-building meetings, HSE seminars, training and, of course, the traditional annual dinner at the beginning of December. These gatherings are always great opportunities to meet new people and to strengthen the feeling of belonging to the Total community.
2014 was the year for record production both in terms of gas and total hydrocarbons with more than 1.6 billion cubic meters of gas exported and 13 million barrels of oil equivalent produced. “Block B is an incredible success story,” explained Douglas Haldane, Business Development and Legal Manager. “The figures speak for themselves: in 1999, TEPB’s reserves were estimated at 137 Mboe. Today, we are talking about revising our initial reserves at nearly 500 Mboe.” This is what will rank it as an “elephant” in oil and gas jargon! In parallel with the daily challenges, another ongoing issue that is very time consuming is the unitisation process dealing with the gas reservoirs straddling Brunei and Malaysia. Unitisations are not uncommon worldwide but the cases we deal with for Brunei-Malaysia are quite unique. The ultimate goal is to agree on how much hydrocarbon belongs to Brunei and how much to Malaysia: quite a challenge! Regular meetings are organised with Malaysia in order to find an agreement. Negotiations are progressing well in 2015.
The history of Block B is far from complete. For sure, there will be some unexpected new challenges along the way but one thing is certain: the development and success of Total in Brunei owes a lot to the overall friendly atmosphere of the country and to the generosity of its people. All those who had a chance to work in Bandar over the last 25 years have only great memories and most of them have missed the peacefulness of the place, the walks in the jungle and the pleasant ambiance at the office. The on going development of the MLJ field is a real technical achievement but above all, it’s a real human success story.