EMP to spend $58 million on marginal fields<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
Local oil and gas firm PT Energy Mega Persada (EMP) will spend
\nUS$58 million to develop its two marginal fields and cash in on
\nan incentive recently offered by the government.<\/p>\n
President director Rennier AR Latief said that the company
\nwould be able to recover 20 percent more of its incurred cost,
\nequal to almost $70 million.<\/p>\n
\"We have two marginal fields that we want to develop in
\nKangean,\" he said on Thursday, referring to the oil and gas block
\nin East Java that the company acquired from Anglo-American energy
\ngiant BP Plc. last year.<\/p>\n
The government announced the incentive earlier this week to
\nmake marginal fields -- defined as fields within a producing
\nblock, which under the current production sharing contract (PSC)
\nterms and conditions, has a rate of return (ROR) of lower than 15
\npercent -- more attractive to investors.<\/p>\n
\"We fit the requirements, so we get the incentive,\" said
\nRennier.<\/p>\n
The two fields are expected to produce 10,000 barrels of oil
\nper day within one year.<\/p>\n
EMP, controlled by Bakrie Group, also announced that its net
\nprofit for 2004 reached Rp 74.2 billion ($7.82 million), almost
\nfivefold higher than Rp 15.36 billion booked in the previous
\nyear.<\/p>\n
Despite the high growth, the company missed the target of Rp
\n189.5 billion set in the prospectus for its initial public
\noffering last year, citing higher deferred taxes.<\/p>\n
Surging oil prices sent revenue to reach Rp 855 billion in
\n2004, up from Rp 513.12 billion recorded a year earlier.<\/p>\n
Last year, the company found a new gas reserve of 330 billion
\ncubic feet (bcf) in its block in the Malacca Strait. \"We will
\nproduce some 60 million standard cubic feet per day (mmscfd) in
\n2006,\" said Rennier.<\/p>\n
EMP already has the capacity to produce 20 mmscfd, of which a
\nquarter is used for the company's own use. \"We are negotiating
\nwith (state power firm) PLN to see if they want to buy the gas,\"
\nsaid Rennier.<\/p>\n
Aside from the new gas reserve, the firm also found 14 million
\nbarrels of oil reserve and 10 bcf of gas reserve in Tanggulangin
\nfield, located within the Brantas block in East Java.<\/p>\n
Rennier further said that the company was not interested in
\nparticipating in new oil and gas block tenders. \"We have only
\nexplored 20 percent of our own blocks,\" he said. \"Our policy is
\nto develop them or acquire other producing blocks that have good
\nexploitation potential.\"<\/p>\n
The government is scheduled to offer 46 oil and gas blocks, of
\nwhich 13 were proposed by investors, 23 leftovers from previous
\nyears and 10 new ones, in May.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/emp-to-spend-58-million-on-marginal-fields-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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