EMP eyes new oil and gas blocks to boost output
Fitri Wulandari, The Jakarta Post, Jakarta
Oil and gas company PT Energi Mega Persada (EMP) plans to acquire small and medium scale oil and gas blocks to boost its reserves and production.
EMP's president Rennier A.R. Latief said the firm was interested in blocks owned by major energy firms which have begun production and are ready to market their output.
According to Rennier, the major energy firms, often referred to as the Seven Sisters, are now selling their small and medium- scale oil and gas fields because they want to focus their investments in blocks that have large reserves.
"They are now getting rid of smaller blocks with reserves below 100 million barrels for oil and below 2 trillion cubic feet (TCF) for natural gas. These blocks are our target," Rennier told reporters over the weekend.
"This would boost our reserves, production and income fast," he added.
Acquiring ready-to-develop blocks, Rennier said, was more profitable as the company would not be burdened with exploration costs. In addition, it would minimize risk.
EMP, which plans to sell 30 percent of its shares via an initial public offering in May, has probable and proven oil reserves of 34.3 million barrels. Meanwhile, natural gas reserves stand at 130 billion cubic feet (BCF) of probable and proven reserves.
The second largest privately owned oil and gas company in Indonesia at present, EMP produces 10,500 barrels of oil per day (bpd) and 70 million cubic feet per day (MMSCFD) of natural gas.
The company plans to increase its production to 12,000 bpd and 80 MMSCFD for oil and natural gas respectively.
Rennier did not give specific targeted as to which blocks would be acquired by the firm, but acknowledged they would be in a value range of between US$50 million and $350 million.
EMP is interested in the Kangean block in Madura, which is owned by Anglo-American energy giant BP Plc., which plans to sell its interest in the block. The Kangean block consists of the Pagerungan field and Terang Sirasun field.
"We have submitted the bid document," Rennier said.
Rennier said the company also faced competition from international oil and gas companies who are eying small and medium size oil and gas blocks.
Exploration blocks were also in the company's sights for acquisition, but Rennier said the company would study the risks in developing the exploration blocks.
EMP is the parent company of Panama-registered oil firm Kondur Petroleum S.A. and natural gas producer Lapindo Brantas Inc.
Kondur is a production sharing contractor for an oil block in the Malacca Strait while Lapindo Brantas operates onshore and offshore natural gas fields in East Java.
This year the company has allocated $135.7 million for investment. It plans to drill a total of 39 wells in the Malacca block and Brantas block.
The company will be the second Indonesian oil and gas company to be listed on the Jakarta Stock Exchange after PT Medco Energi International.