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UNCON 11

Assessment of Shale Gas Resources

July 2018

Chonqing China

INTRODUCTION – East Malaysia potential

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• East Malaysia comprises of Sabah and Sarawak is a vast area totaling almost 200,000 sq km, making up approximately 60% of the Malaysia land mass.

• Much of the land is covered by primary or secondary rainforest, with many ranges of mountains and high hills, making access to the interior difficult.

• Onshore East Malaysia is largely unexplored for conventional hydrocarbons. A few clusters of oil and gas exploration wells have been drilled near the coast (about 40 in total, many pre-1950’s), and a number of outcrop and mapping studies have been carried out historically.

• This area has been identified as potential area for Unconventional Play and the exploration stage is still at early stage with no well yet to test the unconventional play.

CBM

Shale gas

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Geology of Sarawak

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• The Sarawak basin is one of the most prolific hydrocarbon producing basins within the geologically complex Southeast Asia.

• The geological complexity with regard to evolution of the basin has prompted many previous scholarly works yielding various models.

• Forms the southern margin of Oligocene-Recent South China Sea basin and evidences suggest it has undergone phases of rifting and sea-floor spreading in the South China Sea marginal basin

NW – SE Cross Section of Sarawak

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SetapFormation

EOD and Lithology of Setap Shale

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Stratigraphic Chart

Sarawak

Sabah

Geological Map of East Malaysia and outcrops

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Setap Shale

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thick bedded sst with sharp erosive base overlying

greyish shale

younging direction

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SETAP SHALE IN MIRI AREA

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Miocene Sequence Onshore Sarawak

Meligan Formation

Setap Formation

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Oligocene Outcrops

Duplex structures in the Crocker Formation.Folded and faulted Crocker Formation.

Moderately deformed Temburong Formation. Highly deformed Temburong Formation.

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Petroliam Nasional Berhad (PETRONAS) 2014

Presentation Title (acronym) ;Division – Name/OPU/HCU/BU (acronym) ;

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• Estimated thickness is over 2000 meters• Shale deposited in marine environment (Cycle I – II)• Some gas shows were observed

source : JX Nippon

Shale Resource Estimation Sarawak Basin

Mapping done for Shale Distribution Map

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Specimen Number Country Basin Formation Age Coordinate Remarks

M-1/2/3/4 Malaysia Sarawak Basin (onshore) Setap Shale Miocene ??? Surface rock samples, Batu Niah, Sarawak

M-5 Malaysia Sarawak Basin (onshore) Setap Shale Miocene Lat. 3 deg 44’ 53.5” , Long. 113 48’54.0” Surface rocksample-1, Batu Niah, Sarawak

M-6 Malaysia Sarawak Basin (onshore) Setap Shale Miocene Lat. 3 deg 37’ 51.3” , Long. 113 31’08.1” Surface rock sample-4, Batu Niah, Sarawak

M-7 Malaysia Sarawak Basin (onshore) Setap Shale Miocene Lat. 4 deg 8’ 38.7” , Long 114 deg 15’ 52” EW01 (ditch cuttings), spot samples @ multiple intervals

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Internal source : QGIS

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Analogue and parameters from Tanjung Fm and Sarawak

SetapShale Fm

TanjungFm

source : BGS,EIA

Shale Resource Estimates

Free Gas Assumptions (using EIA method) :GRV estimated interval below 2000m Net thickness estimation done as percentage of organic-rich shaleEstimation were performed over an area of 240 km2 Net Shale thickness range is 300~ 500 ftAnalogue used : Porosity range from 4~ 6 % Bg range : 130~150 Recovery Factors Average used : 20% Gas FVF analogue

Preliminary estimates for GIIP Free Gas range is 2 ~ 9.7 Tcf

Internalsource : Team Analysis,BGS,EIA

Adsorb Gas Calculation :Estimation were performed over an area of 240 km2 Net Shale thickness range is 300~ 500 ftAnalogue used from South Kalimantan Shale

Preliminary estimates for GIIP Adsorbed Gas range is 4 ~ 12 Tcf

Total Gas estimates will range from 6~ 21 Tcf

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Way Forward

• To conduct further refined resource estimation for shale gas

• Better parameters estimates can be utilized apart from nearby analogues to reduce uncertainties

• Plan to drill future onshore wells in 2020 to obtain these parameters

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THANK YOU