Oil production from CPP oil block drops sharply

Crude oil production from the Coastal Plain Pekanbaru (CPP) oil field in Riau province has declined sharply since the transfer of the management of the oil field from Caltex Pacific Indonesia (CPI) to a joint venture between Pertamina and Bumi Siak Pusako, a company owned by the provincial administration, in August, Kontan magazine reported in its latest edition.

The oil production from the CPP field dropped to 38,000 barrels per day (BPD) from around 50,000 BPD only two months after the transfer of the oil field?s management to the new operator, the magazine said.

Pertamina?s director for upstream operation Iin Arifin Takhiyan blamed the decline on the production on the shortage of production facilities such as rigs. "We initially planned to use Caltex?s rigs in conducting production activities for efficiency reason, but we could not because Caltex used the rigs for its own production wells."

He said that Pertamina planned to rent a new rig this month to increase the production level from 38,000 BPD to 40,000 BPD. The leasing cost of the new rig is US$7,000 per day. Next year Pertamina plans to lease another four rigs to further increase the production in the CPP oil block.

With the additional rigs, Pertamina hopes that the production from the CPP oil field would increase to 50,000 BPD, next year. According to the production sharing contract with the government, Pertamina and Bumi Siak will receive 15 percent of the production, while the central government will receive the other 85 percent. (*)