SKK Migas rejects EMCL?s request for higher output

Upstream authority SKK Migas has turned down a request by ExxonMobil Cepu Ltd (EMCL), the operator of Cepu block in East and Central Java provinces, to increase oil production to 200,000 bpd from the current 185,000 bpd.

Bisnis Indonesia quoted SKK Migas Chief Amien Sunaryadi as saying Friday that the regulatory body has rejected the request after taking into account various aspects including so-called sub-surface estimate, flare gas from higher output, and current oil price.

He said that EMCL must maintain output at 185,000 bpd as set in the 2016 Work Plan & Budget.

This portal reported in May, quoting EMCL Vice President for Public and Government Affairs Erwin Maryoto as saying that the company was ready to increase Cepu block production to 200,000 bpd as recoverable reserve is higher than initial estimate, but only if the government and SKK Migas allow it.

To facilitate the higher output, the government must first approve a revision of the existing environmental impact assessment (or Amdal) document, which only allows output level of 185,000 bpd. EMCL must also obtain approval from SKK Migas, Erwin said, to increase the output.

EMCL owns a 45 percent interest in the Cepu block. PT Pertamina E&P Cepu (PEPC), a subsidiary of state-owned oil and gas PT Pertamina, holds another 45 percent interest in the block, while the remaining 10 percent are held by minority local investors. (*)