Cepu block set to produce first oil in May 2014

Rangga D. Fadillah, The Jakarta Post, Jakarta | Wed, 05/23/2012 7:27 AM

The Banyu Urip field at the Cepu block in East Java, operated byMobil Cepu Limited (MCL), a subsidiary of US-based ExxonMobil, is expected to begin producing 90,000 barrels per day (bpd) of oil in May 2014.

“All parties involved in the project must work according to the plan and give their support to ensure everything is on schedule,” upstream oil and gas authority BPMigas head Raden Priyono said during a hearing with House of Representatives Commission VII overseeing energy in Jakarta on Tuesday.

During the early production phase, the output would be around 50 percent of the field’s full capacity and would be ramped up gradually, he said. The target was set for August 2014 when production would be 150,000 bpd and 185,000 bpd in November 2014.

Considering the tight schedule, BPMigas had requested MCL accelerate all work at the site without sacrificing quality, Priyono said.

“If the Banyu Urip project runs well, our target to produce 1 million bpd of oil in 2014 will be achieved,” he said.

Producing the first oil in May 2014, Priyono went on, would only be possible given several conditions.

First, MCL has to drill at least 18 production wells to produce 90,000 bpd of oil, 20 wells for 150,000 bpd and 25 wells for 185,000 bpd. Second, the drilling of each well must be completed in no more than 53 days.

“Third, the production average of each well must reach 7,500 bpd, which is deemed technically possible based on MCL’s studies,” Priyono explained.

The Banyu Urip development is divided into five engineering, procurement and construction (EPC) projects totaling US$1.4 billion.

Priyono reported the first EPC progress had reached 12 percent. The contractor for the EPC has started to mobilize heavy equipment to start the construction of new working areas and temporary offices.

The progress on the second EPC has been gauged at 9 percent completion. Part of the plans for the insulated pipes have been moved from the coating yard as has been the initiations of the purchase of other materials.

The documents for the purchase of the mooring tower for the third EPC is currently being prepared, which brings progress to 6 percent. For the fourth EPC, the progress is 7 percent, where the process to clean up the tanker, which will be used for the floating storage and off-loading (FSO) facility, has already been started.

The progress of the fifth EPC is only 4 percent since the geotech survey for the construction of other supporting facilities was just finished and the creation of the detailed water basin design has just begun.

During the hearing, BPMigas also reported that from January to April the country’s oil production was just 880,701 bpd, far below the target of 930,000 bpd. Gas production was also still lower than the target. The amount was only 8,576 million standard cubic feet per day (mmscfd) from the target of 8,738 mmscfd as stipulated in gas producers’ annual work plan.

With that achievement, the agency predicted that by the end of the year, oil production would only hit 904,000 bpd.

Despite low production, revenues from the oil and gas sector reached $16.2 billion, or 16 percent above the target of $13.9 billion.

http://www.thejakartapost.com/news/2012/05/23/cepu-block-set-produce-first-oil-may-2014.html