Production kicks off: from the Cepu Block in Indonesia
ExxonMobil opens Cepu taps
US supermajor ExxonMobil has started production at the Cepu Block in Indonesia, flowing initial volumes of around 5000 barrels of oil per day amid concerns it may take longer to reach its peak output as progress on the acquisition of land sites for storage facilities remains slow.
In these early stages of production, the block's output has reached around 5600 bpd of oil, with operator ExxonMobil expecting volumes to more than triple in six months time, a report in the Jakarta Post said
"We expect the block to produce up to 20,000 bpd of oil in the first half of 2009," said ExxonMobil Indonesia spokesperson Deva Rachman in an official statement yesterday.
Production start-up was confirmed by state oil and gas giant Pertamina, which holds 50% interest in the block that lies on the borders of Central Java and East Java.
Pertamina said the first oil production came from the Banyu Urip field at the block.
The oil is produced from four wells located on 20 hectares of land within the block.
Pertamina estimates oil reserves in the main Banyu Urip field in the Cepu block at 350 million barrels, above ExxonMobil's initial assessment of 250 million barrels.
The government has high hopes for the block, which at its peak could produce 165,000 bpd - or 15% of total national production - to boost national declining output.
"We hope production will reach 10,000 bpd next March," Pertamina processing director Rukmi Hadihartini at a press conference.
Earlier, ExxonMobil scheduled the Cepu Block to produce up to 100,000 bpd of oil by 2010 and 165,000 bpd by 2012, its vice president, Maman Budiman, said in a 2 December hearing with House of Representatives' Commission VII overseeing energy and mineral resources.
Lawmakers, however, put the company's schedule into doubt as it has yet to complete the acquisition of 250 hectares of land at Bojonegoro, East Java, where the main production facility for the block will be built.
The production facility at the already-acquired area of the Banyu Urip field has been built separately from ExxonMobil’s planned main production facility.
The block is targeted to reach full production capacity by 2012 by drilling 34 production wells and by using a vast oil transportation network with 95 kilometres of pipelines.