PHE ONWJ plans to spend $565m this year

PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ), a subsidiary of upstream oil and gas firm PT Pertamina Hulu Energi, plans total spending of US$565 million this year to help meet production target, according to its 2016 work plan and budget.

The total spending includes $168 million of capital expenditure and $397 million of operational expenditure.

The company plans to produce 36,300 barrels per day of oil, and 163 mmscfd of gas in 2016, said General Manager of PHE ONWJ, Irwansyah on Wednesday. The production target is lower than last year?s realized output of 40,031 bpd of oil and 178.4 mmscfd of gas.

Irwansyah said that this year?s capex will be used to finance drilling of three wells with estimated investment of $35 million, workover of 11 wells (worth $30 million), pipeline replacement ($63 million), and upgrading facilities at five stations ($33 million).

?The opex will be used to finance production activities. Funds entirely will come from our parent company,? he said, adding that production target for this year was lower due to declining production rate and the lingering drop in oil price which has made many planned wells to be no longer commercially feasible. (*)