Investment in Cepu block projected to almost double
Wednesday, December 18 2013 - 12:59 AM WIB
Total investment for the Banyu Urip oil project in Cepu block in the border areas of Central and East Java is projected to increase 80 percent due to the application of water injection technology for the project, a senior staff at upstream authority SKK Migas said on Tuesday.
Mobile Cepu Limited (MCL) will build an artificial lake to store water from Bengawan Solo River to be later injected into Banyu Urip field to keep the pressure of the reservoir when production begins.
According to Abdul Muin, expert advisor to SKK Migas chairman, said the project is not included in the Plan of Development (PoD) that has been approved by SKK Migas and the project will boost the cost of the whole Banyu Urip project by 80 percent.
?The investment will rise1.8 fold,? he said.
His statement was in conflict with the one made by VP of Public Relations and Government Affairs at ExxonMobil, Erwin Maryoto, in June this year, who stated that the project is included in the PoD.
MCL and its partner Pertamina last year tendered the EPC works for the Banyu Urip development. The works were divided into five packages, which are worth a total of US$1.32 billion, namely EPC 1 (for development of Production Facilities Processing worth $ 746.3 million); EPC 2 (for Offshore Pipeline Facilities (72km), $ 60 million); EPC 3 (for Offshore Pipeline Facilities (23km) and Mooring Tower, $ 120 million); EPC 4 (for FSO (Floating Storage and Offloading): $ 300 million; EPC 5 ( for Infrastructure Facilities, $ 95 million)
It remains unclear in which EPC package the water injection project is included.
Abdul further said MCL as the operator targets to produce 27,000 barrels of oil per day from Banyu Urip next year in its 2014 Work Program & Budget (WP&B). SKK Migas has pushed the firm to produce more than the target set in the WP&B, he added.
Editing by Johannes Simbolon