BPMIGAS supports East Java to have equity in WMO

The oil and gas upstream oil and gas regulator BPMIGAS supports the request of the East Java provincial government to have equity in the West Madura Offshore (WMO) Block.

The head of BPMIGAS, R Priyono, said that he had sent a written letter to the Energy and Mineral Resources Minister. ?We hope that the central government would really consider to allow the regional government to get PI (participating interest) in WMO,? said Priyono in Surabaya on Thursday.

He said BPMIGAS and oil and gas industry should support the local government?s intention to get the benefit of the oil and gas industry. ?Regions must benefit from the presence of upstream oil and gas projects in their respective areas"

Saifullah Yusuf, Vice Governor of East Java Province, said that he welcomes the support of BPMIGAS. He said the East Java provincial government will invite Gresik and Bangkalan regencies to discuss participating interest portion of each local governments in the block.

?What?s certain is that we will set up local BUMD (local-government owned company),? Saifullah said.

Priyono said Pertamina Hulu Energi as the operator of WMO is drilling five new wells in KE 38 area. At present, the average production of WMO reaches 14,000 barrels per day (BPD) and is expected to further increase to 20,000 BPD by the end of this year.

The block's gas production is expected to rise to 120 million cubic feet per day (MMSCFD) by the end of this year from 95.5 million MMSCD at present.

Priyono added oil and gas production in East Java will continue to increase, in particular the Banyu Urip field in Cepu Block will reach peak production of 165,000 bpd at end of 2013.

The additional gas production will also come from gas projects in Terang Sirasun Batur being developed by Kangean Energy, Madura BD Development project being developed by Husky Oil and Hess Indonesia?s project in Ujung Pangkah.

Gas production in East Java has reached around 600 MMSCFD at present, while the East Java province demand reaches 900 MMSCFD. ?Hopefully, the existing gas projects would meet the growing domestic demand, which is increasing significantly,? he said. (bernard)