Belanak field to start production next week

Fitri Wulandari, The Jakarta Post, Jakarta

U.S. oil and gas company ConocoPhillips will begin production at its huge floating production facility in the Belanak field in the South China Sea next month, the Oil and Gas Upstream Regulatory Body (BP Migas) said on Monday.

Kardaya Warnika, deputy head of BP Migas, said the Belanak floating production storage and off-loading (FSPO) facility was expected to produce up to 100,000 barrels per day (bpd) of crude oil and 30,000 bpd of liquefied petroleum gas.

"The vessel will sail from Batam to the Belanak field in second week of September. Initial output will be 50,000 bpd and will rise gradually to 100,000 bpd next year," Kardaya told reporters after a meeting with President Megawati Soekarnoputri at the State Palace.

Output from the Belanak field is expected to increase the country's dwindling crude oil output, Kardaya said.

Indonesia is now producing 1.072 million bpd of crude, below its quota of 1.27 million bpd set by the Organization of Petroleum Exporting Country (OPEC).

President Megawati is scheduled officially to launch the floating unit. At 300 meters in length and 60 meters in width, or the size of three soccer fields, the Belanak FPSO is one of the largest floating production facilities in the world.

William J. Bullock of ConocoPhillips Indonesia said the company had invested a total of US$800 million for the floating facility, which was built in China.

Bullock said the company planned to increase its investment by 20 percent to $300 million next year from $250 million this year.

"We continue to be excited about investment in Indonesia and the contract that we just concluded with PGN is a good indication of that commitment," Bullock said.

ConocoPhillips recently signed a $4.3 billion gas sales agreement with publicly listed state gas distribution company PT Perusahaan Gas Negara (PGN).

Under the agreement, ConocoPhillips will supply 2.3 trillion cubic feet of gas from its Corridor Block in Grissik, South Sumatra, via PGN's pipeline to West Java consumers.

ConocoPhillips has net crude oil production of 15,000 bpd, or 4 percent of oil produced in Indonesia so far in 2004. It also produces 248 million standard cubic feet per day of gas, or 8 percent of Indonesia's natural gas output.