BPMIGAS urges ENI to develop JAU Block

By Bernard Loebs

Upstream authority BPMIGAS has asked Italian oil and gas firm ENI to develop the Jambu Air Utara (JAU) as the country particularly the Aceh province is in crucial need of gas.

Widhyawan Prawiraatmadja, Deputy for Planning at BPMIGAS told Petromindo.com Thursday that JAU has gas reserves of 163.2 bcf and 3.4 mmstb of condensate. According to its plan of development which has been approved by the government, JAU is projected to have initial production of 27.2 mmscfd of gas and 1,000 bopd of oil in 2015.

Widhyawan acknowledged that JAU contains small gas reserves, with high level of CO2 and H2S, thus making the cost of development to be high as it requires the process to separate CO2. In addition, the production period for JAU is considered quite short of only 5-7 years.

?But we?re in a dilemma, because Indonesia particularly the Aceh region currently requires gas supply, which gas fields nearby, such as Exxon?s, have continued to decline. That?s why BPMIGAS and the government have asked ENI to continue to develop and produce gas from JAU,? he explained.

According to the POD, ENI will invest US$668.5 million to develop JAU, with potential domestic buyers of the gas including state electricity firm PLN and fertilizer producer PIM.

?Although later on there will be an LNG receiving terminal in Aceh, and despite the projection that gas from JAU will be quite pricey, we still insist on developing the JAU. We?re currently in talks with the two offtaker candidates,? Widhyawan said, adding that aside from JAU, gas supply for PLN in Aceh will also come from Medco?s Block A.

Widhyawan said that as a large company, the conditions at JAU will not cause problem for ENI.

Editing by Reiner Simanjuntak