JP/13/Belanak

Belanak facility officially inaugurated

The Jakarta Post/Jakarta

President Susilo Bambang Yudhoyono has officially commissioned a new floating production facility in the South Natuna Sea's Belanak oil and gas field on Friday, from which the country is expected to reap at least US$7.5 billion in revenue a year.

Funded by U.S. oil giant ConocoPhillips (COP) at a cost of more than US$800 million, the field is to start producing next month.

"Using this Belanak floating production storage and off- loading (FSPO) facility, we hope to boost state revenue, which would in turn increase the people's welfare," Susilo said before officially signing the project.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro has said the country would reap about 85 percent of Belanak's oil output; initially at 20,000 barrels a day, which would gradually increase to about 100,000 bpd in one year.

According to the head of the country's oil and gas regulatory implementing body (BP Migas), Rachmat Sudibyo, Indonesia would be entitled to a share worth up to $7.5 billion a year.

"That was based on the assumption that the crude oil is priced at $35 per barrel," Rachmat said.

In addition to the revenue, Rachmat said, the Belanak field would also boost the nation's relatively stagnant oil production.

"We expect it could help increase our crude oil output to 1 million barrels a day next year."

By the end of September, the country's oil production stood at 966,465 barrel a day of crude.

The project -- at 300 meters in length and 60 meters in width, or the size of three soccer fields combined -- is currently one of the largest floating production facilities in the world.