Production at Sukowati field continues despite conflict

Production activities at the Sukowati oil field in Tuban, East Java will be continued despite conflicts between two contractors ExxonMobil and the Joint Operation Body (JOB) Tuban (a partnership between Pertamina and Petrochina), Koran Tempo reported on Saturday.

The agreement on the resumption of the production activities at the Sukowati field was made during a meeting with representatives JOB Tuban, ExxonMobil, Pertamina and BP Indonesia in Jakarta on Friday.

"JOB Tuban will remain the operator of the field, while the production activities will be continued as initially scheduled," said Zanial Achmad, a senior official at BP Indonesia., the government's agency taking in charge of oil and gas exploration and production.

The Sukowati field was discovered and appraised by two wells funded by ExxonMobil (the operator of Cepu block) and JOB Tuban, with estimated recoverable resources of 25 million barrels. Around 85 percent of the reserves lie in Cepu block, while the remaining 15 percent lie in Tuban block.

Both JOB Tuban and ExxonMobil have agreed to jointly operate the Sukowati field under production sharing agreement, in which Job Tuban will act as the operator. However, when the negotiation was still underway, Job Tuban carried out the trial production without the consent of ExxonMobil. This incited protests from ExxonMobil which later demanded the suspension of the production activities. ExxonMobil fears that drilling activities at the Sukowati field will dry out its oil reserves at its Cepu oil block. (*)