HCML invests US$108 million in Madura Block

Husky-CNOOC Madura Limited (HCML) will invest US$108 million to finance exploration and exploitation activities at the Madura Strait Block, with an outlook that by 2015, the oil and gas block could start producing gas at a volume of 250 mmscfd, which should help ease the gas supply deficit in East Java.

Games Riandi, a manager at HCML, was quoted by Investor Daily on Thursday as saying that his company will conduct drilling activity at six wells in the waters of Sampang Sea and Sumenep Sea.

?We?ll carry out drilling in six wells with average depth of 4,000 feet, which will require financing of $18 million per well, or $108 million in total excluding cost for infrastructure development,? Games said.

He said that by 2015, the block should start producing gas at a volume of 250 mmscf, about 110 mmscfd of which to be contributed by the BD Field in the Sampang Sea, in Sampang Regency, while the remainders by wells in the Sumenep Sea.

Meanwhile, Head of the East Java Energy and Mining Office, Dewi J. Putriani said that gas demand in the province currently stands at 872 mmscfd, while supply from 9 production sharing contractors (PSCs) is only around 457 mmscfd, leaving a deficit of 415 mmscfd. This deficit is projected to increase to 500 mmscfd in 2013.

Dewi, however, is optimistic that gas supply deficit in East Java will decline to only 75 mmscfd in 2014 due to additional gas production from four new PSCs. (*)