ICSID Issues Decision in Favor of Antofagasta plc and Barrick in Reko Diq Arbitration Proceedings

The arid Reko Diq region

Exciting news for Barrick and Antofagasta, after years of frustration. B&A reportedly spent US$500 million on this project and were refused a mining lease and licence to operate by the Government of Baluchistan. Compensation for loss is going to be a most interesting hearing. This is a remarkably robust project and a very long lived mine. This is why we offered B&A US$200 million a few years ago in an attempt to resolve the matter – Good for them they they stuck out the challenge of arbitration.

TORONTO, March 21, 2017 — Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (“Barrick” or the “Company”) announced that an arbitration tribunal of the World Bank’s International Center for Settlement of Investment Disputes (“ICSID”) yesterday issued a decision on the arbitration claims that Tethyan Copper Company Pty Limited (“TCC”), a joint venture between Antofagasta plc and Barrick, filed against the Islamic Republic of Pakistan, in relation to the unlawful denial of a mining lease for the Reko Diq project in 2011.

Yesterday’s decision by the ICSID tribunal rejected Pakistan’s final defense against liability, and confirmed that Pakistan had violated several provisions of its bilateral investment treaty with Australia, where TCC is incorporated.

The damages phase of the proceedings will begin on March 22, during which the tribunal will consider submissions from the parties to determine the amount that Pakistan must pay TCC. A ruling on the quantum of damages is expected in 2018.

The Reko Diq project, located in the Balochistan province of Pakistan, was expected to require an initial capital investment of more than $3 billion. It is one of the world’s largest undeveloped copper and gold deposits, with a potential mine life of more than 50 years.

Commentary

Mineralisation in the Reko Diq area

Reko Diq is a large (10×10 km) volcano-magmatic complex located in the western Chagai magmatic belt in Pakistan. Over 48 porphyry Cu-Au centres are recognized in the Chagai belt. Twenty of them, including the world-class H14-H15 cluster, are located in the Reko Diq district. These deposits are largely associated with four consecutive episodes of magmatism during the Miocene. The porphyry centres are characterized by stocks and dyke swarms of diorite, quartz diorite and granodiorite composition. The deposits offer no technological development challenges. Reko Diq is located 50 kilometres to the east of the 300 million tonne Saindak porphyry copper gold deposit being operated by Metallurgical Corporation of China since 2002 under a lease agreement with the Government of Pakistan.

Deposit Geology

The Reko Diq porphyry district hosts a cluster of 20 Cu-Au porphyry centres in an area approximately 10×10 km bounded by the NW trending fault systems of Drana Koh in the north and Tuzgi Koh in the south.

The underlying volcano-sedimentary rocks at Reko Diq consist of thin-bedded shale, siltstone, shallow marine to fluviatile sandstone and minor discontinuous conglomerate and lava flow of the late Oligocene Dalbandin and Eocene Saindak Formations. The porphyry Cu-Au centres at Reko Diq are spatially and genetically associated with early to late Miocene calc-alkaline diorite, quartz diorite and granodiorite intrusions.

Hydrothermal alteration at Reko Diq is typical of porphyry Cu deposits. The porphyry centres at H14-H15 are characterized by a central potassic zone surrounded by phyllic (quartz-sericite-pyrite) and outer propylitic (chlorite-epidote) alteration. The main ore stage (chalcopyrite±bornite) mineralization is generally disseminated in host the porphyries and occurs in veinlets with a total sulphide content of 2-3 vol. percent. The chalcopyrite to pyrite ratio decreases at shallow levels. A distinct late stage pyrite+chacopyrite±molybdenite assemblage associated with D-veins is common in most of the porphyry systems at Reko Diq. The bornite to chalcopyrite ratio increases with the intensity of potassic alteration and magnetite content, which gives rise to higher Cu-Au grades (0.8% Cu; 0.6 g/t Au) in the deep central part of the deposits. A high sulfidation type assemblage of covellite+bornite+pyrite in association with quartz+sericite±kaolinite alteration is identified mainly in the sandstone and conglomerate units of the H15 system. Overall, a metal zoning from Cu-Au at the center and depth with potassic alteration and increasing Mo in the margins and upper parts of the porphyry system at H14-H15, can be defined.

The supergene oxidation is commonly very weak in the district with leached zone of less than a few meters. The only supergene enriched Cu blanket at Reko Diq is preserved in the central Tanjeel porphyry Cu deposit in which an irregular, 50 to 100m-thick chalcocite blanket, is developed beneath a 40-50m-thick leached cap dominated by jarosite and local hematite. The chalcocite blanket (0.5-1.0% Cu) has a gradational lower contact with low grade hypogene Cu-Fe-sulfide mineralization at depth.

Exploration History

Regional exploration for porphyry copper mineralization was initiated in 1993, when BHP Minerals signed a joint venture mineral exploration agreement with the Baluchistan Development Authority, over an area of 13,000 km2. Following an orientation survey over the Saindak deposit, regional geochemical exploration using −80 mesh and the bulk leachable gold (BLEG) method was conducted from 1993 to 1995, with the collection of approximately 5,000 samples. Sixteen anomalous areas were defined and follow-up work, including geologic mapping and standard rock geochemistry, was carried out over them. This work delineated 14 prospective areas, of which Reko Diq, Ziarat Pir Sultan, Ting-Dargun, Kirtaka, Machi, Dasht-e-Kain, Koh-i-Sultan, Durban Chah, and Ganshero were judged to be the most promising. Additional mapping, rock geochemistry, and ground magnetics were completed from 1996 to 1998, followed by 20,000 m of reverse circulation and core drilling. This program resulted in the discovery of the Reko Diq porphyry copper cluster, including the supergene enrichment blanket at Tanjeel (originally named H4) and the nearby hypogene copper-gold deposits at H14-H15 (also referred to as Western Porphyries), H8, and H13.

Geophysical surveys, both induced polarization and magnetics, were completed over them. These and other targets were drilled in several short programs during 2003 to 2006, for a total of approximately 48,000 m, including 24,000 m of infill drilling at Tanjeel. The new resource for Tanjeel, announced in late 2006, was 126 million metric tons (Mt) at 0.7 percent Cu, all leachable supergene-enriched sulfides. In 2006, a joint venture between Antofagasta Minerals S.A. and Barrick Gold Corp. acquired 100 percent of Tethyan Copper Company and its 75 percent interest in the Reko Diq and regional licenses and initiated an aggressive infill drilling program and scoping study at H14-H15. Resource drilling during 2006 to 2009 at Reko Diq totaled approximately 136,000 m resulting in completion of a feasibility study during 2010 for a 110,000 tonne per day operation producing copper-gold concentrate for export.

Reserves and Resources

Reko Diq is one of the largest known undeveloped copper-gold porphyries with resources of 5.9 billion tonnes at 0.41% copper and 0.22 g/t gold for 54 billion pounds of copper and 42 million ounces of gold. Within this resource is a high grade zone with 400 million tonnes at 0.9% copper and 0.6 g/t gold and a supergene resource at Tanjeel of 214 million tonnes at 0.6% copper. Significant potential exists within the Reko Diq porphyry cluster for expansion of this resource and a number of targets remain only lightly explored.

Reko diq resources – a very significant deposit

Planned Development

The planned development included a conventional open pit mining operation utilizing hydraulic face shovels and trucks feeding a conventional concentrator utilizing industry standard crushing, grinding and flotation. Tailings will be deposited in a engineered TMF.

Location of the Reko diq deposit and infrastructure – or lack therof

Power will be provided by a purpose-built 190 MW power station adjacent to the mill faculty.

The Reko Diq deposit produces a clean high grade concentrate with 28-31% copper and 7-22 g/t gold. Concentrate at a 52% pulp density will be pumped via a 682 km buried slurry pipeline to the port of Gwadar presently being redeveloped by a Chinese company.

At Gwadar Port a de-watering facility using high pressure filters will produce a concentrate with 7.5% water, which will be conveyed to a portside warehouse. A conveyor and ship loader will also be constructed.

Project Cashflow Analysis

Cmi Capital constructed a cashflow model based upon available information with costs from comparable recent projects. Two models were evaluated, a base case model with an open pit mine and conventional mill treating 120,000 tonnes per day (TPD) and an expanded model with a production rate of 200,000 TPD after year 5. These models with mine lives of 30 years consume only 21% to 33% respectively of the existing resource. In addition there is potential for the exploitation of higher grades in the early years, the discovery of additional reserves and the addition of a dump leach SXEW facility to treat the large Tanjeel supergene copper deposit (240 Mt at 0.6% leachable copper).

This analysis (with the cashflow models limited to 30 years) indicates that Reko Diq is an economically robust, long life project as can be seen below (metal prices used were a few years ago).

  • Copper Production: 162,000 to 257,000 TPY
  • Gold Production: 260KOz to 408kOz PA
  • NPV (08): US$2 to 3.4 billion (at long term metal pricing)
  • IRR: 15% to 17%

An outstanding project that has potential to significantly improve the outcomes for the peoples of Baluchistan and bring much needed development to a very challenging part of the country.

Solar Activity remains subdued – with the chance of a C-Class Flare. Surface Temp remain at 5778K – largely unchanged for the last 100 Million Years.

Face of the sun 20170324 – Courtesy NASA and the SOHO Mission: https://sohowww.nascom.nasa.gov/sunspots/

“Analysis of Solar Active Regions and Activity from 22/2100Z to 23/2100Z: Solar activity has been at very low levels for the past 24 hours. There are currently 1 numbered sunspot regions on the disk.
IB. Solar Activity Forecast: Solar activity is expected to be very low with a slight chance for a C-class flare on days one, two, and three (24 Mar, 25 Mar, 26 Mar)”

The continues to show little sunspot activity and is very quiet as we enter the solar minimum.

Sun Spot Number Progression during solar cycles 23 and 24 Courtesy NASA: http://www.swpc.noaa.gov/products/solar-cycle-progression

 

Could we now be entering the period prior to the Maunder Minimum cold period

Solar Cycles 3 through 6 compared with Solar Cycles 23 through 24 Courtesy: https://wattsupwiththat.com/2013/03/05/how-long-to-the-2425-solar-minimum/

 

 

 

Solar  cycles 22 and 23 are show very similar trends to SC 03 and 04 which receded a 70 year period when there were no reported sunspots resulting in reduced insolation and a very cold period in northern europe.

A Garden in the Panygurishte

Roses in the Panygurishte

Roses and almost everything else grows  with abandon in the valleys of the Panygurishte.  This region is famous for the

Panygurishte Treasure

The Panagyurishte Treasure  is a Thracian treasure excavated on December 8, 1949, by three brothers who worked together at the region of “Merul” tile factory near the town of Panagyurishte, Bulgaria: Pavel, Petko, and Michail Deikov. It consists of a phiale, an amphora and seven rhytons with total weight of 6.164 kg of 24-karat gold. All of the objects are richly and skilfully decorated with scenes of Thracian myths, customs and life. It is dated from the 4th-3rd centuries BC, and is thought to have been used as a royal ceremonial set by the Thracian king Seuthes III. As one of the best known surviving artifacts of Thracian culture, the treasure has been displayed at various museums around the world. When not on a tour, the treasure is the centerpiece of the Thracian art collection of the National Museum of History in Sofia.  If for no other reason this is why you should visit Sofia, Bulgaria.  The treasure should be housed in the town of Panygurishte.

Once Again a 5 Year Old


On January 12th I managed to fracture my 5th Metacarpal on my right (dominant) hand.  Not so painful but really a little inconvenient and its for the next 4-6 weeks.  Turning adversity in opportunity I am learning to write with the left hand and I will post the daily result here.

This is a remarkably interesting experience.  I now recall learning to write, something I had thought little about.  I now appreciate the issues our kids face.  This exercise also requires the most intense focused concentration.  In a short time I have noticed a significant improvement and my diary does not look quite so chaotic.

 

Nepal – Fantastic Mountains

Just returned from three weeks in the Himalayas –  truly wonderful.  The mountains and the geology were wonderful.  We walked from moderately deformed Lesser Himalayan Series though the Metamorphic Core of the Orogen and across the South Tibetan Detachment Fault into weakly deformed and metamorphosed marine sediments of the Tethyan Ocean.  If you are a geologists this is a transect that you simply need to do and in addition its just a  great adventure.  Planning has already commenced for the 2017 expedition up into the remote Tsum Valley in northern Nepal.

near-bimthang-nepal-john-c-menziesthe-magnificient-manaslu-nepal-john-c-menziesspectacular-terrane-nepal-john-c-menziesnepalese-mountains-manaslu-john-c-menziesnepal-early-morning-john-c-menziesnepal-john-c-menziesmagnificient-nepal-john-c-menziesmountains-nepal-john-c-menziesmanaslu-in-the-early-morning-light-nepal-john-c-menzies

Trekking Around Manaslu, Nepal

Below is the final itinerary for the Manaslu Trek, commencing October 10 in Kathmandu.  We will be posting on Twitter and Facebook and you can follow our Spot Transponder here.

Mt Manaslu Trek, October 2016, cmi Capital Team – Click for High Resolution

View the Trek Route and Points of Interest in Earth Google.

Activity   Comments
Day -03: JLM/JCM/MKM arrive in Kathmandu Arrive in Kathmandu TBA
Day -02: JCM/JLM/KMK Kathmandu Shopping for equipment and provisions
Day -01:  JLM  Kathmandu Shopping for equipment and provisions
Day 01: Drive from Kathmandu to Barpak (2000m), depending on raod condition may have to walk up the final 1000 m elevation from the valley. 8-9 hours Today, we drive from Kathmandu to Barpak following the road towards  Pokhara before turning off .   We travel 50 km up the Prithvi Highway then turn north passing through Chanaute where we turn off the road towards Barpak.  We climb steadily passing though Baluwa and Rangrung.  We pass within 500 metres of the epicentre of the devastating 2015 7.8 earthquake.  From Rangrung at an elevation of 850m we climb through Mandre on narrow roads that follow the contour up to Barpak where we spend the night.
Day 02: Trek Barpak to Larpak (2200) 6-7 hours We climb from Barpak up 800 metres and over the ridge to Larpak through lush forests and spend the night in Larpak.
Day 03: Trek Larpak to Khorlabeshi (875m) 7-8 hours From Larpak the trek follows the contour of the ridge  with spectacular views across a 700 metre valley above Gumda and onwards around the contour towards Khorla and then down to the  Budh Kandaki river and the village of Khorlabesi where we spend the night.
Day 04: Trek from Khorlabeshi to Jagat  (1410m) 6 hours From Khorlabesi we take careful note of the weather conditions as this is one of the more hazardous portions of the trek.  The left side of the river is dominated by unstable geology and was the site of a recent avalanche which killed 4 and injured 11.  We pass upstream past Tatopani and Yaruphant before arriving in Jagarat where we spend the night.
Day 05: Trek from Jagat to Deng (1840m) 6-7 hours Today, our trail climbs over the ridge and reaches Dovan. We cross a long suspension bridge over the Yaru Khola and climb some stone stairs  to Tharo Bhanjyang. After crossing the river  and climbing through small villages, we get to Deng Khola and then to tiny village of Deng where we spend the night.
Day 06: Trek from Deng to Namrung (2630m) 6-7 hours Today, our trail climbs up to Rana which is a short distance beyond Deng. After passing some houses, our trail climbs high above the river and drops into the Shringi Valley passing through Bihi Bazar. Our trail makes further ups and down through the forest before reaching Ghap and eventually though thick bamboo and rhododendron forest we reach, after a steep climb,  Namrung where we stay overnight.
Day 07: Trek from Namrung to Samagaon  (3530m) 6-7 hours Today, our trail makes a serious and long ascent through the forest of bamboo and rhododendron crossing the river several times past the villages of Lhi and Lho Bazar.  We climb through a forest of oaks, fir and rhododendrons and enter the closely packed houses of Lhi. Further, our trail leaves Lihi village and enters another village of Sho (2960m) where we get some spectacular views of Mount Manaslu North (7157m) and Naike Peak (5515m). Walking further will bring us to the settlement of Shrip. We continue to the village of Samagaon where we stay overnight.
Day 08: Samagaon – Pungyen gompa – Samagaon or Manaslu BC Today is spent gaining acclimatization to altitude.  We will, depending on the weather and avalanche risk either climb to Pungyen Gompa or Manaslu Base Camp up the glacier.
Day 09: Trek from Samagaon to Samdo (3830m) 4-5 hours Our route from Samagaon passes juniper and birch forests and the stone huts of Kermo Kharka today. Trekking further for some hours, we eventfully reach at Samdo where we stay overnight.
Day 10: Samdo: Acclimatization and Exploration Day We spend a day in Samdo for acclimatization above 4000 metres. We will hike up into the surrounding hills and we stay overnight at Samdo.
Day 11: Trek from Samdo to Dharmasala (4470m) 4-5 hours Today, we descend on a wide and gentle trail from Samdo. We pass through a stone archway. We climb gently over the huge Larkya Glacier and get to the ridge where there is a viewpoint over the edge of a huge gorge. We reach Dharmasala after trekking for some hours. We stay overnight at a local guesthouse in Dharmasala.
Day 12: Trek from Dharmasala to Bhimtang (3720m) 8-9 hours Today, we leave Dharmasala very early crossing several moraines. We ascend past four frozen lakes and reach Larkya La from where we can witness the tremendous views of Himlung Himal (7126m) and others including Annapurna II, Gyaji Kung, Cheo Himal, and Kang Guru. We further descend along the grassy moraine to a small meadow called Bhimtang where we stay overnight.
Day 13: Trek from Bhimtang to Tiliche (2320m) 5-6 hours Our trail today drops from Bhimtang and crosses a glacial stream. We then descend into a beautiful forest of pine and rhododendron to Hompuk. After descending further, we reach the fenced field of Karache and to the village of Gho. Tilche is nearby, where we spend overnight.
Day 14: Trek from Tiliche to Tal (2300(m) 5-6 hours Today, our trail drops down and passes through several fields, houses, and forests of rhododendron and oak. We descend through a scrub forest and reach Dharapani. Trekking for some time, we eventually reach at Chyamje, where we stay overnight.
Day 15/ 26th Oct: Tal – Syange  (1080m) 6-7 hours  Today we trek down the Marvangdi Valley  to Syange where we spend the night.
Day 16: Drive from Syange to Kathmandu 8-9 hours Today, in the morning, we drive back to Kathmandu from Sange It takes approx. 8-9 hours to arrive at Kathmandu. We celebrate the farewell dinner together with Green Valley Nepal Trekking Team. We stay overnight at standard hotel on B/B plan.
Depart Kathmandu

Mining Journal Bullish on Ilovitza

Mining Journal is remarkably bullish on the Ilovitza project in Macedonia.  John C. Menzies, CEO of Cmi Capital Limited was previously the CEO of Euromax and built the company and its exploration assets over an 8 year period.

The ilovtiza mine is planned for the back of the large bald mountain behind the villages of Ilovtiza and Stuka in Macedonia
The Ilovtiza mine is planned for the back of the large bald mountain behind the villages of Ilovitza and Stuka in Macedonia

The Ilovitza mine is planned for the back of the large bald mountain behind the villages of Ilovitza and Stuka in Macedonia\n\n\”Multi-billion-dollar returns from a world class gold-copper resource are usually the preserve of mining’s majors, not a minnow. But they are exactly what investors in Euromax Resources (TSX: EOX) have to look forward to from the US$475 million Ilovica project in Macedonia, which is ready to move forward in what president and CEO Steve Sharpe describes as an ideal environment for building major new mining projects.\n\n“This is exactly the time to be building a copper-gold mine of this size because the amount of chits that are being offered to us now in terms of major capital items that would normally be the long lead stuff,” he says. “The offers are coming from mining companies, from suppliers that have cancelled orders, and this is all brand new equipment at a fraction of the retail price or list price. So I expect to see some fairly chunky capex and operational savings.”

Production is slated at 83,000 oz pa of gold and 16,000tpa of copper, starting in 2018, with overall average process recoveries at 83.3% for gold and 81.3% for copper”.

Ilovitza is a Tertiary porphyry copper-gold deposit and is ideally situated for development being close to services, water and infrastructure.  The measured and indicated resources total 250 million tonnes containing 2.6 M ounces of gold and  550,000 tonnes of copper.   While the grade is low, the low stripping ratio, low infrastructure capital and operating costs and proximity to rail and smelters reports an attractive NPV and IRR in the feasibility study.

Manaslu Trek Update

Sunset on false summit, Manaslu. Credit Himalayan Expeditions

 

As departure date approaches for our trek in the Manaslu region,the monsoon season remains in full swing.  On Manaslu (8,163m) this year there are a remarkable number of foreign climbers and climbing Sherpas.  Seven Summits Trek is reporting 60 climbers and 70 Sherpas on the mountain, Asian Trekking has 18 foreign climbers and Himalayan Experience has five.  Trekking Camp Nepal is managing a Korean team and then there are the Chinese.   Considering that Manaslu has only been summited 980 times since Toshio Imanishi and Gyalzen Norbu first climbed it on May 9, 1956, 2016 should see a large number of summits.  This large increase in interest should have a very positive economic impact on the Budh Kandaki Valley communities hit hard by the 2015 earthquake.

Russel Brice from Himalayan Experience reported September 8:

    • Himalayan Experience now in Base Camp (BC) after leaving Kathmandu on August 29 for their 9th trip to Manaslu;
    • Himalayan Experience team flew into Samagaon by helicopter. Supplies however still portered over Larkya Pass from the Marvangdi Valley to the west. Team Cmi will however be trekking up the Budh Kandaki valley after a steep descent following a traverse just 1 km from the 2015 earthquake epicentre.
    • Russel Brice reports considerable new house development in Samagaon but slow progress on road and track clearing along the Budh Kandaki Valley which was severely impacted by the 2015 earthquake.
The thriving village of Samagaon, just before the trek up to Base Camp. Credit Himalayan Experience
The thriving village of Samagaon, just before the trek up to Base Camp. Credit Himalayan Experience

On September 13 Russel Brice reported that the rain continued.

    • Rain in Base Camp (BC) continues. Meteotest suggests that the tail end of the monsoon is approaching with BC on the edge of the rain band –  still its very wet.
    • BC is filling with Himalayan Experience, Seven Summits and Japanese teams with a large group of Chinese waiting for a weather break in Samagaon.
    • The Japanese team is attempting the East ridge route to the summit and reportedly making good progress.
    • Seven Summits have the rope fixing contract for all teams for 2016 and are making good progress and on the 11/9 got within 200m of C2 after using 8 ladders on the upper reaches of the Hour Glass.  They made the route to C3 yesterday.
    • Himalayan Experience spent the night at C1 on the 12th.
Benegas Brother Expedition to Manaslu trekking down the Budh Kandaki valley towards Samogan which they reached yesterday September 15. Remote spectacular and currently wet. Manaslu is up to the right of the image and Samogan is directly ahead. Team Cmi will be walking in the opposite direction. Credit: Benegas Brothers
Benegas Brothers Expedition to Manaslu trekking down the Budh Kandaki valley towards Samogan which they reached yesterday September 15. Remote spectacular and currently wet. Manaslu is up to the right of the image and Samogan is directly ahead. Team Cmi will be walking in the opposite direction. Credit: Benegas Brothers
View down Manaslu from C1. Note the absence of snow due to heavy precipitation. Credit: Himalayan Experience
View down Manaslu from C1. Note the absence of snow due to heavy precipitation. Credit: Himalayan Experience

 

Alan Arnette comments that Seven Summits is already on their final acclimatization rotation aiming to spend nights at Camps 1, 2 and 3 before returning to base camp for the usual late September weather window.

Meanwhile Benegas Brothers Expeditions are mounting an expedition this year as well.  The last members of their team arrived in Kathmandu on September 4.  They left for Manaslu BC, September 7, via 4×4 to the village of Nagani Khola –  the end of the road.  The team trekked up the Marvangdi Valley and over Larkya Pass.  The Benegas Brothers team members reached Samagaon on the 15/9.  They will now stage to Base Camp.  This is a rapid ascent route and gives limited opportunity for acclimatization for climbers.  We will be trekking in the reverse direction over the pass after visiting Manaslu Base Camp.\n\n Benegas Brother Expedition to Manaslu trekking down the Budh Kandaki valley towards Samogan which they reached yesterday September 15. Remote spectacular and currently wet.

In summary, it’s been wet in Nepal this season and as of writing the freezing level was up to 5,000 metres.  There is little snow on the lower slopes and progress up Manaslu has been fast.  This more remote region of Nepal, around  Manaslu should be both a challenge and a delight. 

Our route will begin in Barpak with a  steep 1000 metre ascent to the ridge and rapid 2,000 descent to Laprak, Gumda and the Budh Kandaki river –  in the first two days.  We will then walk up the Budh Kandaki Valley and eventually over the Larkya Pass at just over 5,000 metres.   We will post regularly on this blog ( and Twitter, Facebook and Linkedin) when communications allow.

We leave Kathmandu on on 12th October –  should be quite the hoot.

First Production from Bangka by Chevron Indonesia

Chevron Indonesia has started production from the Bangka Field in the Kutei Basin offshore East Kalimantan following an investment decision by the company in 2014 and subsequent Indonesian government approvals.  Development drilling commenced in September 2014.

Chevron Production platform

Geology

The 60,000 km2 Kutei basin extends from the central highlands of Borneo, across the eastern coast of the island and into the Makassar Strait. It is the largest Tertiary basin in Indonesia with up to 15 km of sediment.  The Kutei is an extensional basin in a foreland tectonic setting. Extension began in the Mid Eocene with subsequent thermal sag, and isostatic subsidence.  Rapid, high volume, sedimentation related to uplift and inversion began in the Early Miocene.

Syn-rift deposition in the Eocene was focused in small, localised depocenters within individual half-grabens.  The initial graben fill is highly variable due to the wide zone of rifting, and ranges from fully terrestrial in the western basin, to entirely marine in the eastern basin.  Syn-rift sedimentation following the initial graben fill is variable across the basin, but several distinct facies tracts have been identified. Non marine, deltaic, shallow marine, deep marine and carbonate platform syn-rift deposits are found in the basin.

Sag phase deposition began in the Upper Eocene to Oligocene. A regional depocenter developed in response to marine transgression. The eastern basin, already influenced by marine conditions quickly transitioned to a deep marine depositional environment, while the western basin transitioned more slowly. A thick marine shale was deposited across much of the basin, while carbonate sedimentation continued on along the basin margin and across topographic highs.

Large carbonate platforms developed along the basin margins as the result of shallowing marine environments in the early phases of the Late Oligocene tectonic inversion combined with a marine regression. As tectonic uplift of central Borneo continued into the lower Miocene, the westernmost portion of the Kutai Basin was inverted above sea level, forming the Upper Kutai Basin.\n\nIn the Early Miocene large amounts of clastic sediment derived from the rising central mountains, and the now inverted Paleogene flowed into the lower Kutai Basin. Basin inversion in the middle Miocene and Pliocene saw a shift in the deltaic depo-centre eastwards into the Makassar Straight.

Neogene sediments in the vicinity of the modern Mahakam delta are up to 9 kilometres thick with total sediment thickness of up to 15 km.

Production & Development

In the Kutei Basin in East Kalimantan, most of the Chevron production has come from 14 offshore fields in the shelf area within the East Kalimantan PSC, with the remainder from the deepwater West Seno Field in the Makassar Strait PSC.\n\nThe development will be the first deep-water subsea tieback thus far in Indonesia and will utilise subsea well connections to the West Seno FPU.  It will also be Indonesia’s first deepwater flexible pipeline and the first single deepwater umbilical installed.

Nameplate production capacity in this initial development stage is 110 MMcf/d of natural gas and 4,000 b/d of condensate. Chevron has a 62% operating interest in the Bangka project with ENI SA holding a 20% interest and Tip Top Energy Ltd with 18% interest.

Building the NextGen Energy and Minerals Companies