Oyong field to flow first oil Q3 2005

Australian oil firm Cue Energy Resources announced on Thursday the Indonesian government had approved the revised plan of development (PoD) for the development of Oyong oil, gas field in Sampang PSC offshore East Java.

The field, which was discovered in 2001 is estimated to contain 8 million barrels of recoverable oil and 130 BCF of recoverable gas.

Under the revised PoD, first oil from Oyong is expected to flow third quarter of this year (Phase I) with initial production of 20,000 BPD, followed by gas production beginning end of 2006 (PhaseII).

The Phase I Oyong development will consist of a simple wellhead structure formed by triangular braced surface well conductors, which will extend above sea surface from a sea floor tall template structure. 7 development wells will be drilled through and between the conductors. 6 horizontal oil production wells, which will be drilled through the oil column of the field. One gas production well will also be drilled at the sametime and one of the oil wells will be converted into gas producer later in the field?s life. Oil and gas will be processed on a nearby moored barge and the oil will be exported by tanker. Solution gas associated with the early oil production will be reinjected until gas production begins.

Construction of the wellhead structure is expected to be completed mid-April 2005, with installation in May using a jack-up drilling rig, which will then drill the development wells.

For the Phase II development, a 60-km 14 inches gas pipeline will be buyilt to PT. Indonesia Power?s power plant in Grati, East Java with gas production 40-60 MMCFD under the term of existing contract.

Sampang PSC is operated by Santos Limited with 45 percent interest. Singapore?s SPC and Cue Energy has 40 percent and 15 percent interest respectively in the block. (alex)