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floating storage and offtake (FSO) vessel, which will be used to process oil produced from the Banyu Urip field in the Cepu oil block in East Java, will be delivered to Indonesia by the end of next month.

The FSO is currently being completed in Singapore'€™s Sembawang shipyard.

'€œIt will be pulled by a tugboat to arrive in Indonesia at the end of September. The trip will take
about a week and it will reach Tuban in early October,'€ said acting chief of the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas), Johannes Widjonarko.

The vessel, which is 340 meters long by 50 meters wide, will be able to store up to 1.7 million barrels
of oil.

Oil from the full-scale development of the Banyu Urip field will be transported via a pipeline to the coast of Tuban, East Java, before passing through a subsea pipeline and being stored in the FSO,
which will be stationed 23 kilometers offshore.

The FSO, which has cost US$400 million to build, was inaugurated on Tuesday and given the name, Gagak Rimang.

The facility, which is a conversion of a vessel previously named the MT Chios, is part of a project to develop the Banyu Urip field, which is currently operated by Mobil Cepu Ltd., a subsidiary of US-based ExxonMobil.

The overall development of Banyu Urip comprises five projects: the development of central processing facilities, an onshore pipeline, an offshore pipeline and mooring tower, the FSO, and supporting infrastructure.

'€œThe five projects are proceeding well, with each one around 90 percent completed,'€ Mobil Cepu'€™s
vice president for public and government affairs, Erwin Maryoto, said.

Banyu Urip is currently under the spotlight as an increase in production in the field will determine whether Indonesia meets its oil-lifting target both this year and in the years ahead.

The Banyu Urip field, which was discovered in April 2001, is estimated to have proven reserves on 450 million barrels of oil.

Banyu Urip is currently producing 30,000 barrels of oil per day (bopd) from its early production facilities (EPF), Erwin said, adding that output from the EPF was expected to increase to 40,000 bopd next month.

All work on the field'€™s development, which is costing $2.5 billion in overall investment, was expected to be completed in March, allowing the company to reach its peak production target of 165,000 bopd in July 2015, according to Johannes.

Indonesia, a former member of the Organization of the Petroleum Exporting Countries (OPEC), is struggling to maintain its oil production to meet growing demand, as output continues to fall with the depletion of several major oil wells.

The country aims to achieve oil production of 818,000 bopd this year and 845,000 bpod next year.

This year'€™s output had reached 788,000 bopd as of the end of July.

Johannes said next year'€™s production target would only be in the range of 810,000 bopd to 830,000 bopd if the development of the Banyu Urip field was not completed by March.