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alaysia'€™s Petronas Carigali Sdn. Bhd. is preparing significant investment in an effort to discover more hydrocarbon reserves to develop its offshore Kepodang field at the Muriah block in Central Java and in Bukit Tua field at the Ketapang 2 block in East Java.

Petronas general manager Hazli Sham Kassim said on Wednesday as much as US$800 million would be allocated in capital expenditure this year for the blocks, which are set for first gas delivery in the fourth quarter of the year.

'€œOn average, there will be $400 million for Kepodang and around another $400 million for Ketapang. The funds will be used for drilling and for construction,'€ he said.

According to Hazli, the company will drill five development wells in Bukit Tua and six development wells in Kepodang.

The Kepodang field at the Muriah block is scheduled to deliver 116 million standard cubic feet per day (mmscfd) of gas while Bukit Tua field at the Ketapang 2 block is expected to produce 20,000 barrels of oil per day (bopd) and 70 mmscfd of gas.

The Kepodang field is scheduled to deliver gas this October.

Gas from the field will be delivered to Tambak Lorok power plant in Semarang, Central Java.

The development of the pipeline to transmit gas from Kepodang to Tambak Lorok, also known as the first phase of the Kalimantan-Java gas pipeline network (Kalija 1), has been delayed for years due to various issues, including permits.

The tender of the Kalija 1 development was won by PT Bakrie & Brothers. The company has decided to team up with state-owned gas distributor PT Perusahaan Gas Negara (PGN) for Kalija 1 and is expected to kick off the project soon so that the pipeline will be ready when Kepodang is on stream.

Petronas is expecting to be able to produce at the range of 2,000 to 3,000 barrels of oil equivalent per day (boepd) from its assets in Indonesia, according to Hazli.

Apart from Kepodang and Bukit Tua, the company is also working on other fields, such as in Bukit Tua South and in South Sumatra and Aceh.

'€œIn Bukit Tua South we have already have the reserves. The exact figure is still being studied. But for sure, there are hydrocarbons and liquid,'€ Hazli said.

Indonesia, a former member of the Organization of Petroleum Exporting Countries (OPEC), is struggling to maintain its oil production.

The country'€™s production has been declining in recent years while demand has kept on growing.

The Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) has called for more exploration to secure hydrocarbon reserves.

The government is targeting oil production to reach 870,000 bopd this year, which is deemed unlikely based on contractor work plans and budgets, with production only reaching 804,000 bopd.

Based on SKKMigas figures, there will be 2D seismic surveys on 9,020 kilometers and 3D seismic surveys on 11,633 kilometers this year as well as the drilling of 206 exploration wells and 1,300 development wells.

'€œAll those plans are aimed at meeting the government'€™s target, including the state income of $30.6 billion,'€ SKKMigas supporting business control deputy Lambok Hutauruk said.