P

ertamina Hulu Energy (PHE), a subsidiary of state oil and gas company Pertamina, will further increase oil and gas production at the company'€™s Offshore North West Java (ONWJ) block following its recent success in breaking the company'€™s production target from the oil block.

PHE'€™s director Kunto Wibisono said in Jakarta on Friday that production at the ONWJ block had reached 40,000 barrels per day (bpd), surpassing the target to average 38,000 bpd set by the company for this year.

'€œWe estimate the production average will continue at a range of between 39,000 and 40,000 bpd until the end of this year. Next year, the target will be increased to 39,000 bpd,'€ Kunto said after the signing ceremony of trustee and paying agent agreement with state owned Bank Negara Indonesia (BNI).

He is upbeat that the actual production will range between 36,000 bpd and 42,000 bpd next year.

Meanwhile, the gas production has reached 200 million standard cubic feet per day (mmscfd), Kunto said. The block is targeting to book an average gas production of 195 mmscfd for a full year.

The ONWJ is currently operated by Pertamina Hulu Energi Offshore North West Java Ltd. PHE has a 58.3 percent stake in the block while the other 36.7 percent is owned by EMP ONWJ, a joint venture between Jakarta listed PT Energi Mega Persada with a company called Owen Holdings. Risco Energy holds the remaining 5 percent. Energi Mega Persada effectively holds 18.7 percent in the ONWJ block.

ONWJ has been the biggest contributor for Energi Mega'€™s performance.

Energi Mega president director Imam Agustino said that the company saw its production touch 50,000 barrels of oil equivalent per day (boepd) as of the end of September. The company is aiming to produce 53,000 boepd in total production by the end of the year.

'€œWe will meet the target as we have seen our peak production of 58,000 boepd to date. The biggest contributor will be ONWJ and Kangean PSC,'€ Imam said.

Energi Mega currently holds interests in 11 oil, gas and coal bed methane assets in the country. The company recently announced that it has purchased stake in oil and gas block in Mozambique.

Energi Mega, whose shares are traded on the Indonesia Stock Exchange (IDX), planned to increase its stake in EMP ONWJ by purchasing the shares owned by Owen Holdings. However, the plan was turned down as the acquisition'€™s financing attempt by selling new shares to the public was unlikely due to bearish capital market.

Imam said that his company continued to evaluate the plan and would focus on increasing production of its blocks to reach a total of 70,000 boepd next year.

PHE'€™s Kunto said that ONWJ would see increase production next year as a number of developments, such as one of areas called Zulu, would begin operations.

On Friday, PHE ONWJ, Energi Mega and BNI signed trustee paying agreements.

In the first agreement signed, BNI agreed to give trustee services to PHE ONWJ to manage earnings from the selling of gas from the ONWJ block.

The purchaser of the gas is the Jakarta administration, which use the gas for the city'€™s public
transportation. The money to be managed is expected to be around US$21 million for a period of three years.

In the second agreement signed, BNI agreed to manage money earned by Energi Mega Persada Bentu Limited, which is Energi Mega'€™s subsidiary, from the sales of gas produced from Bentu and Korinci Baru blocks in Sumatra.

The sales of the gas, which is purchased by state electricity enterprise PT PLN, Riau Andalan Pulp and Paper, and PD Tuah Sekata, is estimated to be at around $60 million per year.