Indonesia

Oil Mining in Indonesia

This area is an old oil-producing area in what used to be the Dutch East Indies. The Dutch discovered oil here over a hundred years ago; the area is still one of the world's major producers. The early fields were shallow, generally less than 1,000 feet, hand dug, or drilled with cable tools; many of them have been depleted and abandoned. Many were sabotaged during the Japanese invasion to keep them from falling into enemy hands and were never restored. Some of the wells in these old abandoned oil fields are still seeping small amounts of crude oil; in some cases, gas continues to bubble up from the reservoirs.

The Indonesians are an ingenious people; some of them have found ways to harvest this oil, refine, and market it on a small scale. If the well casing is intact, they bail out the oil with a pail attached to a rope. If not, they catch the seepage on small ponds, manually skim it off, and take it to the refinery. Small refineries are built near each well or group of wells; the crude oil is carried, usually in a pail or plastic jug, from the well to the refinery. Commonly, it will be a family operation with a house situated next to the well and everyone helping out.

The refinery is simplicity itself, consisting of a trench dug for a fire pit, an oil drum set above the trench and covered with soil, and a small pipe leading off from the top of the oil drum, which acts as a condenser. The crude oil is poured into the oil drum and a fire built in the fire pit below. If it doesn't blow up, the fumes are carried off through the condenser pipe and allowed to cool in the air. If there is running water nearby, it is directed over the condenser pipe to cool it; making condensation more complete so less vapour is lost.

The first product to condense is gasoline, which is drained into plastic jugs or heavy plastic bags. The next product to be distilled off, after the gasoline, is kerosene, The heavy oil remaining is used for tar or burned to heat the next batch of crude oil.

The trick is to keep the temperature hot enough to allow distillation, but remain below the combustion temperature. Theoretically, the crude oil should be heated in the absence of air; it’s not always possible, especially in the later stages of the operation, as the level of crude oil in the drum is dropped.

Usually there is a collection facility in the nearest village where the refined products are sold; transportation from the refinery into town is by bicycle. Heavy plastic bags and jugs of gasoline or kerosene are slung over the handlebars and the frame of the bike as it is pushed, not ridden, to the collection point. The gasoline is then taken to the nearest main road and sold as automotive fuel. The kerosene is used for motorbike fuel or burned in lanterns for lighting.

New wells are being drilled by oil producers in some of those old fields in an attempt to restore production. This can cause some of the older seeping wells to dry up; the best policy is hire the local people or oil miners to work in the field. This option has worked well in most cases where the field has been rehabilitated. The local people have better jobs, the operator has oil production, and Indonesia is able to increase their oil exports.

Another strange thing found in Indonesia is an oil field that recharges itself. Perhaps the only one in the world to do this, Bula Field or Seram Island, was found in 1896 and has been producing more than 16 million barrels of oil since 1919. The amazing part is that the volume of the reservoir is only about 5 million barrels. Production is from shallow Pleistocene sands, which are continuously being recharged from deeper source rocks, probably from Jurassic formations.

(Source: adopted from Richard B. Wells National Drillers Buyers Guide)

Read the Report: How Technology Increases Oil Production

Dandangilo & Beji Block, Bojonegoro, East Java, Indonesia

RECENT NEWS

Publicly traded shell undergoing change of business into Oil & Gas mostly in North Africa & West Africa, and the Middle East. North Africa is awash in petroleum reserves, particularly in Libya, Algeria, Egypt, and Tunisia.

Nigeria is the biggest petroleum producer in West Africa, but Cameroon, Gabon, and the Congo also contain oil reserves.

CURRENT OPERATIONS

Management is currently reviewing several projects in Africa and Middle East and will keep our shareholders up to date on any material developments.