Bumi Siak to spend Rp 33 billion for exploration activities

PT Bumi Siak Pusako (BSP), an oil firm owned by the provincial administration of Riau, plans to invest up to Rp 33 billion in the Coastal Pekan Baru (CPP) oil block which is currently operated by Coastal Plains Pekanbaru (CPP) oil block, Bisnis Indonesia reported on Tuesday.

BSP?s president director, Ramlan Comel, said in Pekanbaru on Monday that the investment funds would be used to finance exploration of five new oil wells immediately after the company takes over the CPP oil block from Caltex in August.

"During the period between August and December 22, the new management will explore five new oil wells which are expected to absorb investment of about Rp 33 billion or about US$3.815 million," he was quoted as saying.

The CPP oil block is part of Caltex Pacific Indonesia?s oil concession areas in Riau. The oil block will, however, be transferred to the government in August after its contract ends. Pertamina and Bumi Siak Pusako have agreed to jointly operate the oil block.

At present, the oil block produces 40,000 barrels per day, far lower than 70,000 barrels per day in the previous years.

Caltex?s president Humayunbosha has said that new investment is needed to maintain the production of the oil block at the current level. "Without new investment, the production will decline by 25 percent a year," he added.

According to Ramlan, BSP is 90 percent ready both in term of technology and human resources in taking over the operation of the CPP oil block. About 200 Caltex?s employees who are currently working at the CPP will likely move to BSP. (*)