Premier plans oil production in East Java, eyes gas deal with province?s buyers
Tuesday, June 19 2001 - 05:52 AM WIB
Premier Oil Indonesia?s president Robin Allan said the company and its partners planned to start producing oil at the Sidayu I field of the Pangkah block early next year.
?We are now in discussion with (state oil and gas company) Pertamina (about the planned oil production),? Allan said on the sidelines of the workshop on the British-Indonesian oil and gas cooperation.
Premier announced in November last year that it and its partners found an oil reserve at Sidayu, which flowed 1,450 barrels of oil per day.
Premier Oil has a 40 percent stake in the block, while Dana Petroleum, also a British firm, has 12 percent. The remaining stake are owned by Amerada Hess (Indonesia-Pangkah) Ltd (36 percent) and Gulf Resources (Pangkah) Limited (12 percent).
Pangkah is approximately 40 kilometers north of East Java?s capital of Surabaya and the major industrial center of Gresik. Surabaya is the country?s second largest city.
Aside from oil, Premier and partners have also found a significant gas reserve in the Ujung Pangkah field of the Pangkah block. The field, located five kilometers south of Sidayu, contains a certified reserve of up to 500 billion cubic feet of gas.
Allan said Premier and partners are now negotiating to sell gas from the Ujung Pangkah field, but he refused to identify the prospective buyers. He only said that the gas would be used to generate electricity.
?We hope to sign gas sales agreement at the end of the year.
?If by then, there?s a real commitment from buyers, the gas project could become on stream between 2003 and 2004 with the capacity in excess of 50 million cubic feet per day (MMCFD),? Allan said, adding the cost for the development of the gas project was estimated at US$100 million.
Allan said Premier and partners would continue exploration at the Pangkah block to double the amount of their gas reserves there. (Alex)