Local energy company PT Medco E&P Rimau, a subsidiary of oil and gas giant PT Medco Energi Internasional, will allocate up to 60 percent of the US$41.3 million from its working commitment scheme (KKP) for enhanced oil recovery at Rimau Block in South Sumatra.

Medco E&P Indonesia president director Ronald Gunawan said on Thursday that enhanced oil recovery could maintain or even boost oil and gas production at the block.

Energy and Mineral Resources Ministry data from 2018 show that average oil production at Rimau Block stood at 8,244 barrels of oil per day (bopd) and 3.68 million metric standard cubic feet per day (mmscfd).

Ronald, the former Indonesian Petroleum Association (IPA) president, said the rest of the investment would be allocated for exploration activities, such as seismic drilling and well drilling.

“Regarding the date to implement those activities, we need to discuss it further with SKKMigas (Upstream Oil and Gas Regulatory Special Task Force), but if you ask me, we want to begin [enhanced oil recovery] as soon as possible,” he said.

Medco E&P Rimau inked Thursday a contract extension for another 20 years of operation until 2043 as the current contract will end in April 2023.

Speaking after the signing, Energy and Mineral Resources deputy minister Arcandra Tahar urged Medco E&P Rimau to find new oil and gas resources either within the block or elsewhere.

“If there is any potential [for oil and gas], please just search because the prevailing policy allows [the company] to do so,” he said, adding that it was also important to maintain current oil and gas production.

Ronald told the press without going into detail that the company was looking at potential sites.

The block’s proven oil reserves stand at 17,675 million stock tank barrels (mstb), while proven gas reserves stand at 17.5 billion standard cubic feet (bscf). (bbn)