Pertamina explores five new wells

Nana Rukmana, The Jakarta Post, Cirebon

State oil and gas firm PT Pertamina, through its western Java unit, is exploring the potential of five new oil wells in northeastern West Java.

The wells, which were drilled from May to September, are the Cipicung, Cemara Selatan and Karang Baru wells in Indramayu regency, the Sukamandi well in Subang and the Tegal Pacing well in Bekasi.

The potential reserves and production lifespans of the wells have not yet been determined, pending further assessment by the company.

"Our expert team is currently conducting further studies to determine whether the wells are economically feasible for exploration and production," a spokeswoman for the western Java unit, Sri Kustini, said.

Three of the wells -- Cipicung, Sukamandi and Cemara Selatan -- are currently being reassessed to ascertain their economic feasibility. The Karang Baru and Tegal Pacing wells are undergoing further seismic tests and surveys to determine their potential reserves.

The new oil wells have an average depth of between 2,800 meters and 3,300 meters. Wells in the oil-rich region typically have a depth of some 2,000 meters.

An oil well is considered economically feasible for exploration if its reserves are sufficient for at least 10 years of stable production output.

Sri Kustini said the exploration and production costs for each of the new oil wells would likely amount to Rp 15 billion to 20 billion (between US$1.5 million and $2 million).

"And that is just a rough figure, as we also have to take into account the costs for land acquisition and future community development programs after production begins," she said. "But such technology-intensive work as oil exploration and production is expensive."

Despite the costs and technological requirements, Sri Kustini said Pertamina would carry out the exploration and the production on its own.

"We have no plans to give concessions for the wells to foreign oil companies, as Pertamina has the technological know-how to explore them ourselves," she said. "We hope the new wells can begin production as soon as possible."

Pertamina is in dire need of discovering new sources of oil, with the country importing hundreds of thousands of barrels of oil -- both crude and refined -- to meet rising domestic fuel demand.

The country's oil production has declined over the past few years by an average of more than 5 percent, due in part to aging facilities and a lack of investment in new oil wells and fields.