East Java’s Cepu Oil Project Taking Shape on Schedule, Exxon Says

Tito Summa Siahaan | December 28, 2012

Construction of the $1.3 billion Banyu Urip oil project in East Java is progressing well and is on schedule for completion by the end of 2014, said an official from ExxonMobil Indonesia, the project’s operator.

Banyu Urip forms part of the Cepu block, which Exxon Mobil and state-owned energy company Pertamina each have a 45 percent stake. The remaining 10 percent is held by four local government companies under a consortium called Badan Kerja Sama Blok Cepu.

The block is expected to help Indonesia to once again produce 1 million barrels of oil per day.

“Due to the good cooperation between all parties involved, the overall progress [of the project] by the end of 2012 has reached 35 percent, with the completion date set by the end of 2014,” said Erwin Maryoto, vice president of public and government affairs at ExxonMobil Indonesia, on Wednesday.

Erwin said that the block, using only early production facilities, currently produces 24,000 barrels of oil per day, higher than the capacity of 20,000 barrels per day, with four out of six wells already in the production stage.

“We continuously evaluate measures to increase production,” Erwin added. “We needs to be as efficient as possible [to increase production] while taking into consideration the safety factors. Because our facilities are designed for early production stages, we can not force it too much.”

Banyu Urip is said to be the largest untapped oil field in Indonesia, with reserves estimated at 450 million barrels.

The field is expected to produce 160,000 barrels per day when it goes on stream in 2014.

After several months of delays, construction of the Banyu Urip project resumed in August after the block’s operator agreed to build health and sport facilities outside the compound which can be used by the public.

The massive project involves the construction of 49 oil wells, a 95-kilometer pipe to deliver the oil to depots, a floating storage facility and an off-loading facility that has capacity for 1.7 million barrels.

There will also be large tanker ships to deliver oil from the floating storage unit.

Indonesia’s oil production has been declining since 2000 and the last time the country produced 1 million barrels of oil or more was in 2006, two years before the nation lost its membership in the oil-exporting countries organization, OPEC.

This year, the state budget set its oil production target at 930,000 bpd, while it has been lowered to 900,000 bpd for the upcoming year.



About artidj

I started working as a field engineer in Oil & Gas industry back in 1996. I do this news clipping of the industry and the geography I am interested in, mainly for my own information. I'm glad you find it useful.
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