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BPMigas Orders Exxon Mobil to Raise Output
Ririn Radiawati Kusuma | January 04, 2012

A worker supervising efforts at Block Cepu mini refinery in Sumengko village, Bojonegoro, East Java. (Antara Photo/Agus Sudarmojo) A worker supervising efforts at Block Cepu mini refinery in Sumengko village, Bojonegoro, East Java. (Antara Photo/Agus Sudarmojo)
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DrDez
6:40am Jan 6, 2012

Soooo faced with a shortfall of Pertamina oil production**(who have lowered their bpd target by 18,000) we respond by demanding overseas up their output to compensate and not that Pertamina up their game or accelerate their plans to open more (and old) wells

**reported here 11th Dec

I wonder who will be blamed when the target is not met this year..

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Indonesia’s state oil and gas regulator BPMigas ordered Exxon Mobil to boost its oil production at the Banyu Urip oil field in Cepu, Central Java by 25 percent as part of the country’s efforts to meet its oil production target this year.

BPMigas, which has the right to supervise oil producers operating in Indonesia, asked the US oil giant to increase its output from the onshore oil field to 25,000 barrels of oil per day this year from an existing 20,000 bpd.

Rudi Rubiandini, a deputy operation official at BPMigas, said in Jakarta on Wednesday that the government has been demanding Exxon Mobil to boost the oil output since last year and that it had set a January deadline for the company to respond to the government’s demand.

“We have held discussions repeatedly with Exxon Mobil since last year. We understand that Exxon does not want to boost the oil production,” Rudi said.

However, Exxon Mobil has had plans to upgrade the block’s production to meet to its maximum capacity of 165,000 bpd by the end of 2014.

Rudi said that an increase in oil production from Exxon Mobil’s oil fields this year would help to meet the country’s oil production target.

BPMigas forecast Indonesia’s oil production to reach 930,000 bpd this year. The government set a target of 950,000 bpd in the state budget.

Rudi said that the Banyu Urip oil field will be able to produce as much as 165,000 bpd in 2014, when the project, estimated to be valued at $1.32 billion, is slated to be completed.

He said that Exxon Mobil should not have problems as it has employed sufficient technology to boost its production to 25,000 bpd.

“They have the technology. All they have to do now is to execute it,’’ Rudi said.

In response, Exxon Mobil said on Wednesday that it was working on a way to boost oil output from the Banyu Urup field.

“Exxon Mobil is now assessing the best mechanism to boost oil production to 25,000 bpd while maintaining security and integrity,’’ it said in a statement.

The Cepu block was the country’s biggest oil find in the last decade and its higher production would help limit declining output from the former OPEC member.

Exxon’s project involves drilling in 49 wells, establishing a centralized oil processing facility and constructing 95 kilometers of pipeline to transfer oil to a floating storage and offloading unit, which has a capacity of 1.7 million barrels.

All crude produced from Banyu Urip are currently being sold domestically. The project plans to recover approximately 450 million barrels of oil.

Mobil Cepu, a unit of Exxon Mobil, is the operator of the Cepu Block. Exxon Mobil holds a 45 percent stake in the block, with Indonesia’s state oil and gas producer Pertamina holding another 45 percent.

Other foreign oil producers in Indonesia include Total E&P Indonesie, ConocoPhillips and Chevron Pacific Indonesia, which produces 370,000 bpd of oil at its Duri block in Riau.