Cepu block may be ready to produce crude oil by 2008
Wednesday, August 30 2006 - 01:51 AM WIB
?There are options for us to bring forward some of the production, but in a smaller volume,? ExxonMobil Indonesia president Peter J. Coleman said Tuesday after a meeting with Vice President Jusuf Kalla.
Coleman said Exxon was looking forward to commencing work at Cepu soon, after the government asked the company to look at 2008 for early production, The Jakarta Post reported Wednesday.
In its talks with the government?s upstream regulator BP Migas, Exxon expects to wrap up negotiations with rig owners at the block by the first half of next year.
?That?s what we?re talking about at the moment,? he said.
BP Migas had urged Exxon and state oil and gas firm PT Pertamina to speed up production from the US$2.6 billion field. Energy and Mineral Resources Minister Purnomo Yusgiantoro had in the signing in March of the block?s joint operation agreement also requested a ?fast-track? development scheme.
Cepu, which straddles the border of East Java and Central Java, has an estimated 600 million barrels of oil and 1.7 trillion cubic feet of gas.
Exxon, which was awarded a 30-year contract until 2035 to lead the block?s development with Pertamina, had expected production by late 2008 and early 2009. At its peak, the field could produce up to 165,000 barrels a day - equivalent to some 20 percent of the country?s annual crude oil production.
With a current oil output estimated at less than 1 million barrels per day amid the rising fuel consumption, Indonesia has recently become a net oil importer.
The country is relying on output from Cepu, as well as from 41 other oil blocks throughout the country, which the government had this month put up for offer, to stem a decline in production.
Besides providing an update on Cepu?s development, Coleman further said that Exxon was also expecting to sign soon a production sharing contract for the Suramana block in Sulawesi, whose bid for development it won in June.
Production is expected by 2010, he said, without mentioning any figures.
The Suramana block comprises 5,340 square kilometers of offshore land under waters with depths of up to 2,000 meters, located in the northern part of the Strait of Makassar basin.
The Irving, Texas-based oil giant also reiterated its commitment to continue investing in Indonesia, looking to participate in the development bids for the 41 blocks if it sees anything interesting, Coleman said. (*)