Jonan, Arcandra differ over Banyu Urip production target

Minister of Energy and Mineral Resources Ignasius Jonan has asked ExxonMobil Corp to increase production at Banyu Urip field in Cepu block, East Java, to around 300,000 bpd from an earlier target of 200,000 bpd.

Jonan made the request at a meeting Wednesday with ExxonMobil Senior Vice President Mark W. Albers as part of a three-day US visit, the ministry said in a statement. The minister claimed that the US oil and gas firm responded positively to the request for much higher production and promised to further assess the potential of the field.

But Deputy Minister of Energy and Mineral Resources Arcandra Tahar apparently has a different view. He was quoted by Kontan as saying Saturday that the Cepu block production facility is designed up to only 200,000 bpd capacity, and that much higher production would shorten the production lifetime of the field.

He said that the proposed 300,000 bpd production target should be properly evaluated.

ExxonMobil through subsidiary ExxonMobil Cepu Limited (EMCL) is the operator of the Cepu block.

Elsewhere, the ministry statement said that Jonan has also asked ExxonMobil to expand its downstream business in Indonesia, suggesting the company invest in retail fuel stations, or aromatic hydrocarbon development in Indonesia. ExxonMobil through PT ExxonMobil Lubricants Indonesia is currently developing downstream business including petrochemical in Indonesia.

The statement also said that Jonan met on Wednesday with Imran Kizilbash, Senior Vice President of Schlumberger Venture Fund Schlumberger Limited discussing new investment to help develop oil and gas fields in Indonesia. Schlumberger proposed two ways to help increase exploration activities in Indonesia, including to multi-client survey in offshore areas approved by the government particularly in eastern part of Indonesia, and through upstream oil and gas data management.

Editing by Reiner Simanjuntak