The government says the Cepu oil and gas block will meet its initial production target of 20,000 barrels of oil per day (bopd) as early as at the end of October, but this means another delay for the block.
Evita H. Legowo, director general for oil and gas at the energy and mineral resources ministry, said that the current capacity of a crude processing facility and a fuel refinery prepared to process the oil from the block was still lower than the 20,000 bopd hoped for.
"The block can only produce the 20,000 bopd when these facilities are ready to process that amount of crude. We expect that this will be complete by the end of October this year," Evita told reporters Friday.
The block's initial production target of 20,000 bopd has missed several deadlines with this level of output scheduled for earlier in 2008. However, in its latest statement, upstream oil and gas regulator BPMigas's chairman R. Priyono said the 20,000 bopd production target would be achieved this month.
Of the 20,000 bopd targeted oil production, 6,000 bopd is supposed to be supplied to a fuel refinery operated by PT Tri Wahana Universal (TWU) and 14,000 bopd is prepared for a crude processing facility operated jointly by state oil company PT Pertamina and China's Petrochina.
"Currently, TWU is only able to receive about 2,500 bopd, while the Pertamina and Petrochina facility is only able to receive about 10,000 bopd," Evita said. Located on the border between East and Central Java, the Cepu block is said to have massive proven reserves of 600 million barrels of oil and 1.7 trillion cubic feet of gas.
Mobil Cepu Ltd (MCL), a subsidiary of US-based oil producer ExxonMobil and state oil and gas company PT Pertamina each hold a 45 percent participating interest in the block. A consortium of enterprises controlled by provincial administrations holds the remaining 10 percent participating interest.
MCL is the operator of the block.
Exxon spokesman Maman Budiman said that the block's current average production was at 5,000 bopd.
"Now we are preparing for the start up of the facilities for the 20,000 early production," he said.
The delay in achieving the initial production may also mean the block also miss its target for peak production of 165,000 bopd. Initially, the peak production target was expected to be achieved in 2010. But, with the latest progress, the government expects the peak production target to be achieved later on, some time between 2012 and 2013.
