Production cost of gas from Cepu block likely to be high

The production cost of gas produced by Cepu Block is likely to be higher than that produced by other gas blocks because the carbon dioxide (CO2) content in the block reaches 45 percent, above the normal average level of around 0-5 percent.

Upstream oil and gas regulatory body, BPMIGAS’s deputy head for operation division Dodi Hidayat said in Jakarta Friday that the high content of CO2 in gas produced in Jambaran field would lead to the increase in the production cost.

He said, however, BPMIGAS had yet to get information from the operators of the Cepu Block, ExxonMobil Indonesia and state oil and gas firm PT Pertamina on the estimated price of the gas with high CO2 content in the block. “We have not discussed the price at the well head,” he said.

He added that development of the Cepu Block would depend on the economic viability. However, he is optimistic that the development of Cepu Block would continue because ExxonMobil, as one of the operators of the block, has technological expertise in CO2 management. “On top of that, the demand for gas in Java continues to increase,” he said.

Meanwhile, ExxonMobil’s spokesperson Deva Rachman reffirmed ExxonMobil’s commitment to developing gas fields in Cepu Block as the company had previously expressed to the government.

She said that a study on the gas development in the Cepu Block was underway.

Cepu Block has estimated gas reserves of 1.7 TCF.(*)