Pertamina EP, IEV Gas team up to develop Pabuaran block
Friday, February 17 2012 - 12:17 PM WIB
Singapore-listed IEV Holdings Limited said its subsidiary PT IEV Gas has on February 16 been awarded an opportunity by PT Pertamina EP, a subsidiary of state oil and gas company PT Pertamina, to jointly develop the Pabuaran Block under an ?operation co-operation?(KSO) scheme. The completion of the terms of this project is subject to the KSO agreement being formalized.
IEV Holdings said the appointment is the first onshore oil and gas project of the company.
The block is located 90 kilometers east of Jakarta in the Subang district, West Java, with a total acreage of about 77.036 square km. KSO is one of the efforts by BPMIGAS, the state upstream oil and gas executive agency in Indonesia, and Pertamina EP to optimize exploration, development and production assets within Pertamina EP?s areas of operation.
Pursuant to the award, IEV Gas was appointed to commercialize Pertamina EP?s operation area and obtain compensation through a ?split? in oil and natural gas production. IEV Gas is to recover all costs incurred in the project before the remaining balance is shared between BPMIGAS, Pertamina EP and IEV Gas.
Under the planned KSO, IEV Gas will commit to undertake exploration and production activities during the intended 15-year concession period, which is subject to the finalization of the KSO agreement expected to be completed by 2Q2012.
IEV Gas said it will engage the relevant experts to ensure further 3-D seismic studies are conducted before the reserves and/or resources can be certified.
?This award is a game-changer and represents our first step towards implementing IEV?s vision to become a complete energy company with upstream, mid-stream and downstream activities,? Christopher Do, Chief Executive Officer and President of IEV, said.
He said besides oil production, the group will have a secure and competitive source of feed gas supply to grow its mobile natural gas sector and increase the volume of energy supplied in Java Island.
?The volume of gas produced enables IEV to build mini LNG and CNG supply chains to supply natural gas to off-pipeline power and industrial customers," Christopher Do said.
The gas produced from the block will also help fulfill the emerging needs of the transport sector as the government of Indonesia is committed to develop its natural gas vehicle program throughout the country in the coming years.
Barring any unforeseen circumstances, work on this project is scheduled to launch in second half of 2012 with the first production from the block scheduled to commence in 2H2013, he said.
Editing by Roffie Kurniawan