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subsidiary of Jakarta-listed Perusahaan Gas Negara (PGN),PT Saka Energi Indonesia, expects to book total oil and gas output of approximately 30,000 barrels of oil equivalent per day (boepd) this year, driven by blocks scheduled to be on stream soon.

The company recorded 23,000 boepd in output in the first quarter of the year, mainly supported by production from the company'€™s Pangkah block in Madura, East Java, which provided around 12,000 boepd. Additional production from Muriah block, which is expected to start production this August, and from Ketapang block, will help the company to meet the target, according to Saka Energi'€™s chief operation and commercial officer, Tumbur Parlindungan.

'€œCurrent output is supported by our producing blocks, which are Pangkah and Southeast Sumatra in Indonesia as well as Fasken gas field in Texas, US. We are expecting Muriah and Ketapang to begin production this year,'€ Tumbur said on Tuesday.

Saka Energi, an aggressive arm of PGN in the upstream oil and gas business, currently has stakes in a number of blocks in the country, including a 100 percent stake in Pangkah block, a 20 percent participating interest in Ketapang block, a 30 percent participating interest in Bangkanai block, full ownership of South Sesulu block with 100 percent in ownership, a 20 percent participating interest in Muriah block and a 8.9 percent stake in Southeast Sumatra. Moreover, year to date, the company has increased its portfolio by finalizing the acquisition of a 30 percent participating interest in West Bangkanai block In January and an 11.67 percent interest in Muara Bakau block earlier this April in a deal worth US$70 million.

The company also has a 36 percent interest in Fasken, which is the company'€™s flagship overseas asset, and in unconventional shale gas business. Saka Energi purchased its stake in Fasken in July last year.

'€œIn some blocks, we'€™ve purchased only a small participating stake because we are still learning how to operate oil and gas blocks,'€ Saka Energi chief executive officer Firman Ardini Yaman said.

Under its development plan, Saka Energi is currently focusing on its wholly owned South Sesulu working area in offshore East Kalimantan. After performing drilling on an exploration well late last year, the company reported that it had found gas reserves of more than 500 billion cubic feet in South Sesulu, which is expected to be able to boost Saka Energi'€™s performance in the future. Following the result, Saka Energi is planning to conduct drilling on the second well, which is located around 1.5 kilometers from the first well.

Saka Energi'€™s parent firm, state-owned PGN, runs its main business in downstream gas transmission and distribution. However, through Saka Energi, it has been increasingly aggressive in expanding its portfolio in the upstream sector, partly because it wants to secure the gas supply to be delivered through its national pipeline network.

PGN'€™s expansion in the upstream sector has created tensions with Pertamina, the country'€™s 100 percent government-owned oil and gas giant as the two firms have become competitors in acquiring producing oil and gas blocks from foreign firms. Meanwhile, Pertamina is also increasingly aggressive in developing its downstream gas business, partly by developing gas pipeline networks through its subsidiary PT Pertagas.