PHE ONWJ buys gas from CNOOC to raise production

PT Pertamina Hulu Energy Offshore North West Java (PHE ONWJ), a subsidiary of state oil and gas company PT Pertamina, and CNOOC SES have signed a gas sale and purchase contract, under which PHE will get 1 BBTUD natural gas for 3 years.

PHE said that the natural gas will be used to increase its oil production in the ONWJ Block. ?The agreement is part of our efforts to optimize production,? said PHE President Director Tenny Wibowo, who together with CNOOC President Director Duan Chenggang, signed the contract in Jakarta on Monday.

Based on the contract, PHE will get the natural gas supply from CNOOC for three years at the price of US$ 5,4 per MMBTU. ?The gas will be used to raise our oil production,? said Tenny.

The gas will be used to fire a power plant in Zulu Flow Station, ONWJ Block. The electricity generated from the power plant is used to operate the Electric Submersible Pump (ESP) in its wells on the block. Initially, the Zulu area is expected to produce oil at 400 barrels per day. It will gradually increase until reaching 1,700 barrels per day in September this year.

Currently, PHE?s oil production averages at 31,000 barrels per day. Based on the government?s target, PHE has a target of producing 35,000 barrels per day. It said that it would continue to increase exploration and production in the block.

Duan noted that CNOOC supported all efforts of the government in increasing production, especially because the gas sold to PHE is flare gas. The step is in line with CNOOC?s efforts to reduce flaring.

Upstream authority BPMIGAS said that the government would get state income from the contract. ?The government will also get state income from the gas deal,? BPMIGAS Public Relations, Security, and Formality Division Head Gde Pradnyana said.

Editing by Benget Besalicto Tnb.