Oil, gas seen to flow from Santos-operated Oyong field Q3 2004

Australian oil firm Cue Energy Resources Limited said Friday during the fourth quarter of 2002, Santos Limited, the operator of Sampang PSC offshore East Java, had completed a draft plan of development (PoD) for Oyong oil and gas field, which contemplates separate but concurrent oil and gas production.

Cue said during the fouth quarter of 2002 tenders for environmental studies were received and a contractor for reserves certification chosen. Front End Engineering Design FEED) tender documents were issued towards the end of the quarter. FEED for the Oyong development is expected to be completed around the end of first quarter 2003 with a final development decision around midyear 2003 and first gas and oil production around the end of the third quarter 2004.

The company, however, did not reveal expected daily production rate from Oyong field.A Santos senior official said last year that Oyong field had 100 million barrels of oil and 100 billion cubic feet of natural gas in place.

The company said substantial progress was achieved in negotiating a sale of Oyong gas and a Heads of Agreement for the sale with state electricity firm PLN is expected to be signed shortly. A final Gas Sale Agreement is expected to be signed by the end of March 2003.

Cue added that on 4 January 2003, acquisition of approximately 1,000 km of infill 2D seismic began over a number of prospects that are candidates for 2003 exploration drilling which is expected to begin around midyear.

Interpretation of the 2002 seismic data over the Mangga prospect confirmed that it is a candidate for 2003 drilling. Plans to drill one or two exploration wells in December 2002 had to be deferred, as the required seafloor clearance survey could not be completed in time, said the company.

Santos holds 45 percent working interest in Sampang PSC, while Coastal Indonesia Sampang and Cue Energy Limited holds 40 percent and 15 percent, respectively. (alex)