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PHE to drill 20 wells, double production

Pertamina Hulu Energi (PHE) WMO says it wants double its oil and gas output by the end of 2013 by opening new wells at its West Madura offshore (WMO) block in East Java

Amahl S. Azwar (The Jakarta Post)
Jakarta
Mon, December 17, 2012

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PHE to drill 20 wells, double production

P

ertamina Hulu Energi (PHE) WMO says it wants double its oil and gas output by the end of 2013 by opening new wells at its West Madura offshore (WMO) block in East Java.

Imron Asjhari, the general manager of PHE WMO, a subsidiary of state energy firm PT Pertamina, said over the weekend that the firm wanted to open 21 production wells at the wedge to increase production to 20,000 barrels of oil per day (bpd) and 140 million metric standard cubic feet per day (mmscfd) of natural gas.

The block currently produces 9,000 bopd and 120 mmscfd of gas from an existing 10 production wells, according to the company. Production has been falling, however, declining at a rate of 50 percent per year.

“Such a decline is rooted in the condition of the oil and gas reservoirs at the West Madura block, which are many in number but small in size. We must not delay our investments in the block by installing new platforms and drilling new wells,” Imron said in a statement. “Without more investment, the block will only be capable of producing 3,000 barrels of crude oil per day.”

The firm was previously approved to invest US$1 billion to develop the offshore block by now-defunct upstream oil and gas regulator BPMigas, which has been temporarily replaced by the government’s SKMigas task force.

The PHE WMO’s investment fund for 2012 was US$708.77 million, comprising $437.99 million for capital expenditures and $270.77 million for operations.

In additional to drilling new production wells, the firm will increase its number of exploration wells from the six to nine in 2013, Imron said.

PHE WMO has yet to achieve its oil production targets after taking over the WMO block from Korea-based Kodeco Energy, which operated the block between 1981 and 2011, when the government declined to extend Kodeco’s contract just days before it expired.

Dwindling production was attributed to Kodeco’s unwillingness to invest in the block amid contract extension uncertainties, according to SKMigas.

Under Kodeco, production at the WMO block topped 26,000 bopd and 170 mmscfd. Imron said PHE had allocated money to conduct more studies and to complete a 3D-seismic survey for the firm’s working areas in the Madura Strait next year.

“If the results are positive like in the northern part of the block, we can start planning for drilling to find more reserves and to further increase output from 2014 to 2016,” he said. 

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