Rift Basin, Sinergi to redevelop old wells in Bojonegoro

By Ruli Setiawan

TSX-listed Rift Basin Resources Corp. has signed a memorandum of understanding (MoU) with PT Sinergi Wijaya Kusumah to redevelop an onshore multi-reservoir oil field of Dandangilo-Beji Block, containing 110 existing wells within an 80 square kilometer, in Bojonegoro, East Java .

PT Sinergi has the rights under a renewable 5-year cooperation agreement with KUD Sumber Pangan (KUD) to produce oil from existing shut-in oil wells in the working area, Rift Basin said in a press statement on Friday.

Rift will apply enhanced oil recovery (EOR) techniques to the existing wells in order to bring them back into production. KUD is a district-level cooperative with the rights, under a petroleum production contract with Indonesian state oil company PT Pertamina, to lift and raise oil from relinquished and mature fields and deliver to a point agreed to between the parties.

The field is currently producing approximately 1,500 barrels per day (bpd) from 6 wells through KUD without the benefit of modern EOR technology.

According to data on file at the University of Pembangunan Nasional Veteran , Jakarta , original oil in place (OOIP) in the field reservoir was 112 million stock tank barrels (MMSTB). Pertamina recorded production of approximately 20 MMSTB during the period 1963-1980 after which no commercial operations were undertaken.

Rift Basin has also entered into a memorandum of understanding with Portvest International SDN BHD (Portvest), whereby both companies will jointly, through a newly established Indonesian foreign investment company, hold 70 percent ownersip of PT Sinergi, which in turn holds the rights to exploit the field.

Portvest will be the operator and responsible for funding initial service and enhancement work required to establish initial production cash flow and to attract a project lending facility.

Wayne Koshman, Rift Basin 's CEO, said that the MoU is an enormous opportunity for Rift Basin and shareholders. ?Relinquished, marginal and mature fields in Indonesia are an established resource that provides a low-cost low-risk opportunity to achieve early cash flow through the application of EOR techniques,? he said.

Editing by Benget Besalicto Tnb.