Production starts on schedule at Cepu

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Dec. 12 -- ExxonMobil Corp.'s Indonesian subsidiary Mobil Cepu Ltd. (MCL) started production of about 5,600 b/d of oil from Banyu Urip field on the Cepu block.

"The field has started its first oil production…with a capacity of 5,600 b/d," said Rukmi Hadihartini, processing director of state-owned PT Pertamina, which holds a 50% stake in the project with MCL.

Rukmi also said Pertamina hopes production will reach 10,000 b/d of oil in March, while MCL spokesperson Deva Rachman said the firm expects the block to produce as much as 20,000 b/d in first half 2009.

Indonesia, aiming to boost the nation's declining output, has high expectations for the Cepu block, which could produce as much as 165,000 b/d, or 15% of Indonesia's total production.

MCL Vice-Pres. Maman Budiman recently told Indonesia's House of Representatives' Commission VII, which oversees energy and mineral resources, that the firm would start oil production as scheduled Dec. 10 despite problems in acquiring needed land (OGJ Online, Dec. 4, 2008).

Lawmakers had put the company's schedule into doubt as it has yet to complete the acquisition of 250 hectares of land at Bojonegoro, East Java, the planned site of the block's main production facility.

The production went ahead at the Banyu Urip field because land there already had been acquired and the production facility was built separately from MCL's planned site at Bojonegoro.

Contact Eric Watkins at hippalus@yahoo.com.

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