PetroChina to keep production constant at Jabung block

Chinese oil firm PetroChina and partners will spend about US$372 million this year to maintain production and to search for new oil and gas reserves in Jabung block onshore Jambi.

The block?s general manager Zhang Xuewen told reporters on Friday during site visit that some $120 million of the expenditure allocation would be in the form of capital spending to develop the block?s production facilities and to drill 5 exploration wells.

Last year, the block?s partnership spent $265 million on the block.

Zhang said Jabung block?s production in 2007 would be somewhat at par with 2006 production of 55,000 barrels of oil equivalent per day (BOEPD). In 2006, the block produced 100 MMCFD of gas, almost all of which were exported to Singapore under a long-term contract trough 450-km pipeline, 12,800 BPD of crude, 9,300 BPD of condensate and 13,000 BPD of LPG. The block has a huge processing facility called Betara Gas Plant.

?We will try to maintain production level of around 55,000 BOEPD in the next few years,? Zhang said.

Zhang said that PetroChina and partners had a successful exploration story in Jabung. ?Five out of six exploration wells drilled in 2006 were successful,? he said. He also added that a series of exploration success the company had made since taking over the block in 2003 from US oil firm Devon Energy has resulted in significant addition of oil and gas reserves. ?Based on current discoveries PetroChina is making on several wells, we expect to add some 150 million BOE of oil and gas into reserves, which will gradually be brought into production,? he said, adding that currently US appraisal consultant D&M was in the process of certifying the some of the block?s discoveries.

A release issued by the company revealed that the company?s cost to drill one exploration well in 2006 was around $2.5 million and average production costs per well were $7 per barrel.

PetroChina and Malaysian firm Petronas have equal interest of 27.85 percent in the block, while PP Oil&Gas, an equal partnership of PetroChina and Petronas, has another 30 percent, with the remaining 14.28 percent held by state oil and gas company Pertamina. (alex)