Govt, Cepu operators sign agreement to speed up oil production by end of 2008

The Cepu oil and gas block is expected to be producing some 10,000 barrels of oil per day (bpd) by the end of 2008, following an agreement to fast-track the development of the block signed by its operators and the government.

 

Abdul Muin the deputy chairman of the upstream oil and gas regulatory agency (BPMIGAS), said Monday that the low output – far lower than the block’s estimated peak capacity of 165,000 bpd - was the best that could be hoped for if the operation of the block was to be brought forward from 2009.

 

Muin said that talks had been held to discuss other scenarios, including those under which the operators would produce more than 10,000 bpd, but for fear of further delays, the government had decided to stick to 10,000 bpd.

 

Besides oil production, Muin also said that the two sides had agreed that the operators would start developing the block’s gas reserves if proven reserves reached 2 trillion cubic feet.

 

ExxonMobil spokesperson Maman Budiman confirmed the agreement to The Jakarta Post, saying that Exxon would now further discuss the details of the equipment needed to produce 10,000 barrels per day.

 

ExxonMobil and Pertamina have 45 percent working interest each in Cepu block with the remaining 10 percent will be distributed to East Java and Central Java regional governments. (*)