SKK Migas approves two PoDs
Saturday, February 2 2013 - 04:38 AM WIB
Upstream authority SKK Migas has approved the second phase of plan of development (PoD) proposed by ENI Indonesia and Husky Oil for the gas production in their respective fields in Muara Bakau Block and Offshore Madura Strait Block with a total investment of US$1.767 billion.
?ENI Indonesia alone will invest US$1.4 billion to develop the Jangkrik North East field in Muara Bakau PSC,? SKK Migas Chairman Rudi Rubiandini told the press during a press conference in Jakarta on Friday.
At the same time the PoD of the MDA-MBH fields has been issued. Total gas to be sold amounted to 380.22 bscf during the fields' production period. First production at the MDA-MBH fields within the Offshore Madura Strait block, East Java, operated by Husky Oil, is slated for early 2016 with a combined initial output of 81.46 mmscfd.
He said that Husky Oil would invest a total of US$396.9 million to develop its fields of MBH and MDA at Offshore Madura Strait Block in East Java province.
Rudi noted that from the development of the gas fields, Indonesia will get a total state income of US$2.32 billion or Rp22 trillion during their productions.
"Of the total state income, about US$1.14 billion will be derived from Jangkrik, and US$1.18 billion from MBH and MDA fields at Offshore Madura Strait,? he said.
He said that the approval of the PoDs given to the foreign companies was merely aimed at increasing the public welfare of all people of Indonesia. ?It?s not for the interests of certain persons or groups,? he said.
In the Muara Bakau Block, the total gas reserve is 417.5 bscf or about 0.4 tscf, which will be produced through four development wells. "Because of its offshore location, its price is also quite expensive," Rudi said.
For comparison, the Arun Block has a total reserve of 17 tscf, Mahakam Block at 22 tscf, Tangguh Field at 11 tscf, and Masela at 6 tscf.
Rudi added, the produced gas will be sent to the Bontang LNG plant, through a sub-sea pipeline. ?This gas production will also be allocated to meet the domestic demand, not only for exports, he said.
"Before I signed the PoD, the total gas supply for domestic market was only at 25 percent, and 75 percent for export. However, after serving as the new Chairman of SKK Migas, I instructed it to be raised to 40 percent," said Rudi.
After talking face to face with ENI company, ENI had finally agreed to allocate 40 percent of its LNG for domestic need, with the estimated price of US $9 per mmbtu. Rudi explained that the production of first gas is expected to begin in late 2015. The production will increase gradually until it reaches a plateau or constant production at 145.5 mmscfd in 2016 for the subsequent 5.5 years. After that, it would decrease naturally and reach the economical lower limit of 35 mmscfd in approximately 9 years.
Editing by Benget Besalicto Tnb.