Cue says Oyong gas development cost soaring

Australian oil and gas firm Cue Energy Limited said on Tuesday that expenditure for the development of gas resources in the Oyong field of Sampang PSC, offshore East Java had swollen to US$117 million.

?The capital cost of the gas development phase has increased in line with the general cost increases being experienced by the petroleum industry,? Cue said in quarterly report statement without revealing original costs estimate.

First gas production of the field is expected in the third quarter of 2009, it said.

Cue also said the manufacturing of the 14 inch offshore pipeline for the gas had been completed and the coating process of the pipe has begun. A contract for pipeline installation is expected to be awarded shortly.

Australia's Santos is the operator of Sampang PSC with 45 percent interest, while Cue Energy and Singapore Petroleum Company have 15 and 40 percent interest, respectively. (denny)