Pertamina explores five new wells

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.