Dwi Martono, president director of PT Pertamina Hulu Energi, Pertamina's subsidiary managing overseas operations, said the SK-305 block, which lies off the shores of Sarawak in Malaysia, began production on June 26, 2010.

"The current oil production rate is 6,000 bpd, but we expect to increase that to 12,000 bpd in 2011," Dwi told reporters Tuesday.

He said the block also produced gas at a rate of 9 million standard cubic feet per day.

The gas production has the potential to increase to 40 MMSCFD, but Dwi said the current focus was to boost oil production.

Dwi said the SK-305 block was a major accomplishment in Pertamina's history as it was the first up-and-running overseas block that the company had been involved in from the get go. "This is a milestone for us," he said. The block, which covers 16,400 square kilometers, is located in waters up to 150 meters deep in Balingian Province off the coast of Sarawak.

The block has estimated reserves of 12 million barrels of oil and 120 billion cubic feet of gas.The block is operated jointly by Pertamina, Malaysia's Petronas Carigali Sdn Bhd and Vietnam's PetroVietnam Exploration Production Corporation. Pertamina holds a 30 percent stake in the joint venture, and Petronas and PetroVietnam hold 40 percent and 30 percent stakes. The joint operation operates 19 exploration wells in the SK-305 block.

The 6,000 bpd of oil produced at the moment come from two production wells. Dwi said the joint venture operated a mobile offshore production unit to drill for oil and gas in the block.

"The mobile facility was chosen for economic reasons as the block does not contain big reserves," he said.The three state companies have also formed a cooperation to develop two more blocks - one in Indonesia and another in Vietnam.In early 2002, Pertamina, Petronas and PetroVietnam established Con Son Joint Operating Company to develop blocks 10 and the 11 in Vietnamese waters.

Pertamina owns a 10 percent stake in this joint venture, while PetroVietnam and Petronas each own 45 percent stakes. Dwi said the joint venture had drilled two exploration wells in the block with an estimated oil production of between 1,500 bopd and 3,000 bopd.

"We expect to start the development stage in 2011. Getting to production will take same more time, maybe in 2016," he said.

The third block operated by the joint venture is the Randugunting block in Central Java. Dwi said the joint venture expected to start the exploration stage at the block next week.

"We expect to drill two exploration wells in Randugunting this year," he said.PT Pertamina Hulu Energi is one of Pertamina's subsidiaries operating in upstream oil and gas business, around 30 percent of Pertamina's total production.

The company expects to produce 55,000 bpd this year. As of the end of the first half of the year, the production rate was still at 54,000 bpd.

Pertamina Hulu Energi said recently that it planned to sell up to 20 percent of shares during the company's initial public offering (IPO) later this year.

The company expects to raise about Rp 10 trillion (US$1.08 billion) to finance its expansion plan, Pertamina's investment planning and risk management director Ferederick ST Siahaan said recently.

Parent company Pertamina's total oil and gas production is around 432,000 barrels of oil equivalent per day (boepd), which it aims to increase to 700,000 boepd by 2014.

Popular

Palm oil expansion in Papua raises eyebrow

Pro-government parties open to scrapping direct regional elections

Businesses project 2026 growth at no more than 5.4%