Santos, partners prefer well head platform and FPSO to develop E. Java discovery

Australian oil and gas company Cue Energy resources said on Monday that after assigning a consultant to study development concept of Oyong oil and gas field offshore Madura Strait, East Java, the preferred development would be to utilize a well head platform and a floating process and storage facility (FPSO).

Cue said in its quarterly report to the Australian Stock Exchange that currently several FPSO's that are available for lease have been identified and meetings held with the contractors.

Simultaneous production of oil and sales gas is envisaged, said the company.

The Oyong field was discovered in mid 2001 by the Oyong-1 well, which encountered a 110 meter gas column underlain by a 38 meter oil column. The Oyong-2 and -3 wells successfully appraised the field and confirmed its potential for economic development.

Earlier, a Santos senior official said Oyong discovery had 100 million barrels of oil and 100 billion cubic feet of natural gas in place.

Meanwhile, the company said that several new leads had been identified in the general vicinity of the Oyong field. The most significant of these is the Oyong Barat lead which has the potential to contain similar gas and oil volumes to those encountered in Oyong.

The joint venture is considering whether this prospect should be drilled later in 2002. Other structural leads have been mapped in both the east and west portions of the block. One of these leads in the western portion has the potential to contain around two trillion cubic feet of recoverable natural gas, said the company.

A 2D infill seismic survey is planned for late 2002 to mature some of these prospects and leads.

Australian oil company Santos Limited is the operator of Sampang PSC, where Oyong filed is located with 45 percent participating interest, while Coastal Indonesia Sampang and Cue Energy hold 40 percent and 15 percent, respectively. (alex/robert)