INPEX entered into a production sharing contract (PSC) with the Indonesian Government in October 1966, at that time cquiring a 100% working interest in the Offshore Mahakam Block. The Attaka Unit was established in April 1970 through the unitization of part of the adjacent blocks owned by INPEX and Unocal (now Chevron), with each company taking a 50% interest. The Attaka field was subsequently discovered, and production of crude oil and natural gas began in 1972. INPEX farmed out a 50% working interest in the Offshore Mahakam Block to CFP (now TOTAL) in July 1970. This venture subsequently made a series of discoveries in the Bekapai (oil), Handil (oil), Tambora (oil and gas), Tunu (gas), Peciko (gas), Sisi and Nubi (gas) fields, all of which have continued to produce crude oil and natural gas. The crude oil and condensate produced from these fields are shipped mainly to oil refineries and power companies in Japan by tanker from the Santan and Senipah terminals. Most of the natural gas is supplied to Bontang, one of the largest liquefaction plants in the world before being shipped as LNG to Japan and elsewhere.

An extension through the end of 2017 for each of these two blocks underpins the overall Mahakam block’s role as a key profit center for INPEX. In addition, negotiations are under way with the Indonesian authorities to secure a contract extension beyond 2018 with respect to the Offshore Mahakam Block.

In July 1977, INPEX acquired a 17.5% working interest in the South Natuna Sea Block B. Later, in January 1994, INPEX increased its total working interest in the block to 35% with the purchase of an additional 17.5% interest. The following fields were subsequently discovered within the block: Belanak (oil and gas), Hiu (gas), North Belut (gas), Belida (oil), Sembilang (oil) and Kerisi (oil and gas).

Crude oil production has continued since 1979. A sales agreement to deliver natural gas to Singapore via Indonesia’s first international pipeline was concluded in January 1999. The pipeline started supplying gas from the block, as well Project Overview by Region as the two adjacent blocks of Natuna Sea Block A and Kakap Block, in 2001. Additional deliveries of natural gas from this pipeline to Malaysia started in 2002. These supply milestones have contributed to the extension of the PSC covering the block until 2028.

Production operations in the Belanak field utilize a world-class FPSO system. Production of crude oil and condensate began in December 2004 and of LPG in April 2007. The Hiu and Kerisi fields came on stream in 2006 and 2007, respectively. Gas production commenced at the North Belut field in November 2009.

INPEX acquired a 100% participating interest in the Masela Block in November 1998 through a public tender conducted by the Indonesian Government. The Abadi-1 exploratory well was drilled in 2000 and confirmed the presence of gas and condensate. This marked the first discovery of crude oil and natural gas in the Arafura Sea, Indonesia. Subsequently six appraisal wells were drilled by 2008 (two in 2002 and four more in 2007- 2008), and gas and condensate were successfully confirmed in all of the wells. In September 2008, based on the results of Pre-FEED of a floating LNG, a development plan was submitted to the Indonesian Government and approval in principle was granted. After a thirdparty evaluation, approval for the plan of development (POD-1) was granted in December 2010 for commencement of LNG production of 2.5 million tons/year.

Currently, various preparatory measures,including Front-End Engineering and Design (FEED) and Environmental and Social Impact Assessment (AMDAL), are underway in the lead-up to development of the Abadi gas field.

MI Berau B.V., a joint venture established by INPEX (44%) and Mitsubishi Corporation (56%), acquired an interest of around 22.9% in the Berau Block, a hub within the Tangguh LNG Project, in October 2001. MI Berau owns a 16.3% working interest (including an actual interest held by INPEX of about 7.17%) in the Tangguh Unit, which is a unitized area spanning the Berau Block and the adjoining Wiriagar and Muturi blocks. MI Berau Japan Ltd., a second joint venture between INPEX (44%) and Mitsubishi Corporation (56%), also acquired 16.5% of the issued and outstanding shares of KG Berau Petroleum Ltd. in October 2007, bringing INPEX’s total interest in the project to 7.79%.

In March 2005, the Indonesian Government approved a development plan for the Tangguh LNG Project and an extension of the PSC until 2035. Subsequently, development work such as the drilling of production wells and construction of an LNG plant was conducted over a period of four years. The first cargo of LNG was shipped in July 2009.