RIMS, Petronas to jointly operate Karapan

The Jakarta Post, Jakarta

RIMS Energy Karapan Ltd (REKL) has transferred a 50 percent working interest in the Karapan exploration block offshore East Java to Petronas Carigali Overseas Sdn Bhd (PCOSB), a subsidiary of Malaysia's state oil and gas firm Petronas.

Both firms will jointly operate the block through a newly- formed, equally-owned joint operating company pending the approval of the Directorate General of Oil and Gas, better known in the industry as Migas, and state oil and gas company Pertamina.

The Karapan block covers an area of 2,839 square kilometers and is located adjacent to the Ketapang block, also offshore East Java, where significant oil and gas has recently been discovered. It also possesses the same geological features as the Ketapan block, where PCOSB has a 50 percent working interest.

"We expect to commercialize the block before 2004 and aim to become a significant oil and gas producer in East Java by 2005," Dixie Bastian, REKL president and CEO, said in a statement.

"Any economic gas discovery in Karapan would only be easily developed and absorbed by the growing market in East Java," he added.

According to Dixie, the joint operating company has identified nine drillable prospects in Karapan with recoverable potential of 680 million barrels of oil and 2.5 trillion cubic feet of gas with a 50 percent success profitability.

The joint venture plans to drill three exploration wells in Karapan beginning June 2002, and at least one well in 2003.

The productivity of the Karapan block has been proven by former operator Cities Service, which drilled the JS 14 A-1 well in 1976. The well produced 520 barrels of oil per day and 25 million standard cubic feet per day of gas.