INPEX entered into a production sharing contract (PSC) with the Indonesian government in October 1966, at that time acquiring a 100% working interest in the Offshore Mahakam block. The Attaka Unit was established in April 1970 through unitization of part of 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 is shipped mainly to oil refineries and power utilities 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, etc.

A 20-year extension to the PSC lasting until 2017 underpins the Mahakam block’s role as a key profit center for INPEX. Negotiations are underway with the Indonesian authorities to secure a further contract extension beyond 2017.

In July 1977, INPEX acquired a 17.5% working interest in the South Natuna Sea block B, which includes the Udang oil field. 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. In 2001, the pipeline started supplying gas from the block as well as the two adjacent blocks of Natuna Sea block A and Kakap block. 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 (Floating Production, Storage and Offloading) 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. In December 2009, the North Belut field started its natural gas production.

INPEX acquired a 100% working interest in the Masela block in November 1998 through an open bidding process. The Abadi gas-condensate field was discovered during the drilling of the first exploration well in the block in 2000.

This marked the first discovery of hydrocarbon (crude oil and natural gas) in the Indonesian Arafura Sea. Two appraisal wells were drilled in 2002 to confirm the extent of the gas structure. Subsequently, reserve evaluation and studies for selection of development scenario were conducted. Further four appraisal wells were drilled between May 2007 and July 2008 to enhance the accuracy of reserve estimates and confirm the extent of the Abadi field. Pre-FEED (Front End Engineering Design) work on a Floating LNG was also conducted in parallel. Utilizing the resulting data, INPEX submitted a development proposal in September 2008 to the Indonesian government based on the concept of a Floating LNG for natural gas liquefaction within the Abadi field. The proposed plan of development (POD) was approved by the government. FEED work and environmental and social impact assessment will be in process for the development of the Abadi field.

MI Berau B.V., a joint venture established by INPEX (44%) and Mitsubishi Corporation (56%), acquired in October 2001 an interest of around 22.9% in the Berau block, a hub within the Tangguh LNG Project. 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 Corp. (56%), also acquired approximately 16.5% of KG Berau Petroleum Ltd. shares in October 2007, bringing INPEX’s total interest in the project up to approximately 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 works such as drilling production wells and construction of LNG plant were conducted for four years. The first cargo of LNG was shipped in July 2009. LNG of 7.45 million tons per annum has been supplied to buyers in China, South Korea and North America which long-term sales agreements have been concluded with.