Santos may ask higher production share in Jeruk field
Monday, June 18 2007 - 05:54 AM WIB
Australian oil company Santos Limited may ask upstream oil and gas regulating body BPMIGAS to revise the production split for Jeruk oil field in Sampang PSC, offshore East Java because it deemed the field no longer economically viable for development under the existing production split ratio.
“There have been talks (between Santos and BPMIGAS on a possible revision of the produciton split), but they have not submitted any official letter yet,” said Achmad Luthfi, BPMIGAS’ Planning Affairs Director, in Jakarta on Monday.
Achmad did not specify the production split of Jeruk field but under the standard production sharing contract (PSC), contractors take 15 percent of a field's oil output and 30 percent of its gas output and give the rest to the the government.
Santos had indicated it wanted a split ratio of 51:49 with the government taking the largest portion, similar to the one applied for Aceh's Block A. “Principally, it’s the same as Block A,” he went on.
Santos' government relation officer Deddy Mochtar T admitted that the company has started questioning about the economic viability of the development Jeruk field given the fact the reserve found in the field was not as much as it had expected. "We shall discuss with BPMIGAS on Jeruk's condition," Deddy said.
BPMIGAS' head Kardaya Warnika said he could not commment on the issue because his office had yet to receive an official letter from the company.
Last year, Santos said that the size of recoverable oil in Jeruk discovery was likely less than 50 million barrels, much less than the figure of 170 million barrels originally thought.
The company recently said that the block’s owners were studying possibility to commercialize the Jeruk discovery. “Development of the field will require resolution of commercial and various technical aspects,” the company said on April 27, 2007.
Santos (Sampang) Pty Ltd (operator) owns majority stake in the Sampang PSC with a 45 percent stake. Other participants in the Sampang PSC include Singapore Petroleum Sampang Ltd 40 percent, Cue Sampang Pty Ltd 15 percent. Medco Strait Services Ltd has a 22.5 percent stake in Jeruk field. (godang)