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pstream oil and gas regulator BPMigas reported that Pertamina Hulu Energi-West Madura Offshore (PHE-WMO), a subsidiary of state oil and gas company Pertamina, had discovered new reserves at the block that could potentially add to the company’s oil and gas production in the third quarter of this year.

The discovery comes from the first exploration well drilled in 2012, PHE KE38-2, which went 113 feet into the oil zone and 506 feet into the natural gas zone. From early estimates, the well is projected to produce 3,500 barrels per day (bpd) of oil and 10 million standard cubic feet per day (mmscfd) of gas.

The well, which is one of nine exploration wells scheduled to be drilled this year, was first drilled on Feb. 24, while the oil and gas reserves were found in March 12.

“In addition to the exploration wells, we hope this year, PHE-WMO can drill five production wells, and the block’s production can therefore increase significantly. The WMO block is our priority in an effort to reach the national production target,” he said in a press statement sent to The Jakarta Post on Thursday.

Besides PHE-WMO, the other priorities were the Mahakam block in East Kalimantan, which was operated by Total EP Indonesie, the Duri and Minas fields in Riau by Chevron Pacific Indonesia and blocks operated by Pertamina EP.

The discovery was made after BPMigas encouraged PHE-WMO to accelerate the procurement of rigs in order to start delayed drilling programs, Rudi said. He added that the firm was scheduled to install the PHE KE3B rig in August 2012.

PHE-WMO is currently under the spotlight following its failure to achieve its oil production target after taking over the block from Korea-based Kodeco Energy in May 2011.

As of March 14, WMO’s oil production was 12,848 bpd on average, far below the target of 23,000 bpd in the revised draft of the 2012 state budget. According to BPMigas, the company is still optimistic to reach the target of 20,690 bpd this year as stipulated in its work program and budget (WP and B).

Prior to acquiring the block, Pertamina promised to set aside US$1 billion to finance the development of the WMO block in an attempt to boost its oil production to 25,800 bpd in 2012, 32,500 in 2013, 37,200 bpd in 2014 and 40,500 in 2015.When the block was taken over, its oil output was 13,400 bpd.

As of March 1, the country’s oil output was only 885,443 bpd. According to BPMigas’ data, there are 31 oil contractors failing to reach targets set by the government in the revised draft of the 2012 state budget.

The revised draft of the 2012 state budget stipulates that the oil production target is revised from 950,000 to 930,000 bpd. However, from the WP and B submitted by companies, the production rate is set at only 890,874 bpd.

BPMigas claimed earlier that if contractors could accelerate the implementation of all programs in the WP and B, and if they took other “out of the box” measures, the oil output might be cranked up to 910,000 bpd.