Business

ExxonMobil agrees to hike
output at Cepu block

After more than a year of tough discussions, ExxonMobil has agreed to ramp up oil production at the Cepu block, bordering Central Java and East Java, from the current rate of 22,000 barrels per day (bpd) to 27,000 bpd.

Upstream oil and gas regulator BPMigas’ deputy for operations Rudi Rubiandini revealed that the company had accepted the government’s request to increase output to help the country achieve a national production target of 950,000 bpd in 2012.

“The technical concept has been accepted. They say they’re able to boost production to 27,000 bpd,” he told reporters on Thursday, on the sidelines of a hearing of the House of Representatives Commission VII overseeing energy in Jakarta.

He said that Mobil Cepu Limited (MCL), the ExxonMobil subsidiary operating the block, would conduct the front-end engineering design (FEED) and the tender process for early production facilities in the near future.

MCL has been preparing the technical details for the project. However, due to the large amount of investment required, it should wait until the FEED and other studies were finished, Rudi said.

“The precise date when the production increase can materialize is still uncertain, but we expect the project to be completed in the second semester of this year,” he said.

BPMigas first requested that the company increase output at the block’s Banyu Urip field last year. However, the agency earlier claimed that MCL was reluctant to do so, due to technical problems. BPMigas said that the three existing wells at the field could produce around 37,000 bpd of oil.

Commission VII member Sutan Bhatoegana, a Democratic Party legislator, said that MCL’s work at the Cepu block was very slow.

“In 2014, the block should have produced 165,000 bpd. However, I don’t see any progress made on the full development project at the block,” he said.

He also suggested that the commission set up a working committee to discuss the slow progress of the Banyu Urip field and called on MCL to terminate inefficient contractors.

Responding to the statement, Exxon said that a joint study would determine the steps that could be taken to boost production to 27,000 bpd while maintaining appropriate safety, integrity and quality-assurance processes.

MCL initiated production at the Banyu Urip field in late-2008, followed by the start-up of an early production facility with a capacity of 22,000 bpd in August 2009.

Post Your Say

Selected comments will be published in the Readers’ Forum page of our print newspaper.