Pertamina finds huge oil reserves in Cepu and Jambi

JAKARTA (JP): State oil and gas company Pertamina said on Thursday that it had discovered significant oil reserves in Cepu, Central Java and Jambi.

Pertamina said that its Technical Assistance Contract (TAC) partner, Mobil Cepu Limited, which is an affiliated company of the U.S. oil giant ExxonMobil Oil Corp, successfully found oil reserves of about 250 million barrels at the Banyu Urip #3 well.

"The discovery in the BU-3 well is one of the most significant oil findings in Indonesia in the past decade," Pertamina said in a statement.

It said it expected initial production from the BU-well by 2003. Planning was underway for a phased, fast-track development of the Banyu Urip discovery, Pertamina said.

In February, Mobil Cepu encountered oil and gas at a total vertical depth of 5,735 feet during drilling activities at the BU-3.

Oil was tested at a rate of 3,817 barrels per day, from the Middle Miocene Carbonate Kujung formation, and 463 barrels per day (bpd) from the overlying Ngrayong sandstone formation, Pertamina said.

"We are very pleased and excited with this development and are expecting significant investment from ExxonMobil to exploit this promising discovery," Pertamina management production sharing partner director Iin Arifin Takhyan said.

He added that Pertamina had accepted an option to acquire a 10 percent stake in the project.

"Partnerships with leading international companies like ExxonMobil, are an effective and efficient means of accomplishing the aggressive production goals required," said Pertamina upstream director Gatot K. Wiroyudo.

Pertamina further said it had found oil at its own operation area in Jambi, during exploration activities at the West Ketaling #4 well. The company estimated the oil production in the well would reach of 4,027 bpd.

Drilling started last month and reached a vertical depth of 1,200 meters, where oil was found at the lower Baturaja formation.

Pertamina said the West Ketaling well was once part of a contract area belonging to Pertamina's production sharing partner Jambi Shell.

Shell left the area due to insignificant findings.

Pertamina said that it produced about 3,000 bpd of oil from several marginal oil fields in Jambi.

Indonesia is struggling to boost its fast depleting oil reserves to meet the country's high consumption growth, and extend the state's earnings from crude oil exports.

Within the next two years, Pertamina plans to raise its oil output by 160,000 bpd from the development of two large offshore oil fields in the Makassar Straits and West Natuna.

These fields are also expected to increase Indonesia's natural gas production by 490 million cubic feet per day, and 45,000 barrels of liquefied natural gas (LNG) per day. (bkm)