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ertamina EP, the upstream business unit of state-owned oil and gas company PT Pertamina, has signed a joint cooperation agreement with PT Axis Sambidoyong Energi to develop a production field in Sambidoyong, Cirebon, West Java.

Under the cooperation agreement, Axis, which is a subsidiary of Korea’s Fountain Energy Corporation, plans to invest US$11 million over three years to support production activities.

Pertamina EP’s operations director, Muhammad Husen, said his company would be the sole operator of the field. He added that due to limited human resources and funds, the company partnered with Azis to develop the field.

“Let’s say we need to raise oil production to 4,000 barrels per day (bpd); that is not easy as it will need huge financing. That is why we sought partner companies,” he said after the agreement signing at Pertamina EP’s office building in Jakarta on Thursday.

Husen said the Sambidoyong field, which covers an area of 16.5 square kilometers, was one of the most difficult oil fields to be developed.

He said the field had yet to produce any oil as in two earlier tenders, no companies had reach
agreement to develop the field with Pertamina.

Now with the newly signed cooperation, “We aim to produce 500 bpd of oil in the first year of production, but by the fifth year, it could peak to between 3,500 bpd and 4,500 bpd,” he added.

In accordance with Husen, Fountain Energy Corporation chairman, Chung Yung Cho, told The Jakarta Post that he looked forward to developing the project as Indonesia was one of the fastest growing economies in the region.

“We cannot be absolutely certain because the oil lies underground, but if everything goes as planned, we expect to produce 2,000 to 4,000 barrels of oil per day,” he said, adding that he expected the first barrels to be produced next year.

Pertamina EP’s president director, Syamsu Alam, said Pertamina currently had 22 joint cooperation schemes, locally known as KSO, which cover different activities including exploration, production and applying enhanced oil recovery (EOR) technology.

“The recently signed KSO is the 13th one on production activities. Besides that, we have six on exploration activities and three on EOR,” he said.

He added that with the signing, which is the first cooperation between Pertamina and a Korean energy company, many new partners may see Indonesia as a promising investment location.

According to Pertamina EP’s data, the company recorded an average oil production of 127.8 thousand bdp during the first half of this year.