Sele Raya to resume operation following court ruling

Local oil, gas firm PT Sele Raya Merangin Dua is set to resume drilling activities at the Merangin II oil and gas block in South Sumatra after the Supreme Court rejected a lawsuit filed by the Musi Banyuasin (Muba) Regeny, Kontan reported on Saturday.

?There is no more problem?,? Eko Arianto, Senior Manager for Exploration at Sele Raya, told the paper, adding that the Muba Regency administration no longer have the right to suspend the company?s operation.

The Muba administration suspended in the middle of March 2015 the operation of Sele Raya at the Lumbian well in the Merangin II block in the wake of borderline dispute with neighboring Musi Rawas Utara (Muratara) Regency as the two administrations claimed territorial rights over oil and gas assets located in the disputed area. Muratara Regency is a new regency spun off Muba Regency in 2013.

Following the Supreme Court ruling, Sele Raya plans to drill four wells in the Merangin II block, Kontan said. First is the West Belani 9 well. Drilling at the well actually had taken place since early this year.

Second is the West Belani 10 well. Drilling program reaching a depth of 700-800 feet is ongoing, targeting a total depth of 2,100 feet, hopefully to be completed end of April 2015 or earlier, Eko said.

Third is the North Tampi 1 well, which is planned to be drilled in early May of this year. And fourth is to drill the Lumbian well in October of this year. Drilling budget for each well is between US$4-5 million.

The Merangin II block was awarded to Sele Raya in Oct. 2003. Sele Raya operates the block with a 44.6 percent interest, while the remaining is held by Merangin B.V. (35.4 percent) and Sinochem Merangin Ltd. (20 percent).

Besides the Merangin II block, Sele Raya also operates two other oil blocks ? Belida oil block in South Sumatra and Blora block in Pati, Central Java, which are now on exploration stage. (*)