Santos says E. Java field to produce below 10,000 BPD

Australian top oil firm Santos Limited said on Wednesday oil production from its Oyong field in Sampang PSC offshore East Java might be less than 10,000 barrels per day when it came into production in early 2006 due to likely reduction of recoverable oil reserves.

The company said in its quarterly release that drilling program to date has revealed a more complex, compartmentalised structure than previously modelled. ?As a result, the 2P gross recoverable oil reserves are likely to be reduced from 8.3 mmbbl, and the initial oil production rates are likely to be less than 10,000 bbl/day,? said the company.

The company said that 2P gross recoverable gas reserves of 128 bcf or the anticipated gas production rate of 40 mmscfd was not impacted.

Santos said by the end of September 2005, Oyong development was over 70 percent complete.

The company said modifications continued to the Floating Storage and Off-take barge with some process modules being installed.

Tendering of the gas export pipeline and installation contract has commenced, with first gas production scheduled in early 2007. Total capex for both the oil and gas development phases is expected to be US$120 million.

Santos is operator in Sampang PSC with 45 percent working interest

Elsewhere, Santos reported that the Cliffs 10 jack up rig has commenced conversion in Dubai to the Maleo Producer, a Mobile Offshore Production Unit.

The company said the signing of the Maleo gas sales agreement in late May with state gas distribution firm PGN has allowed several contracts to be awarded and construction of the Tall Template Structure wellhead facility to begin.

Forecast first gas production remains on schedule for the second half of 2006. The project is now around 15% complete and development drilling is expected to commence during Q1 2006.

Santos is the operator of Madura Offshore PSC, East Java, where Maleo field is located with 75 percent working interest. (alex)