Output from the Banyu Urip field, part of ExxonMobil’s Cepu block in East Java, is crucial to Indonesia’s long-term efforts to meet rising domestic demand as production declines at ageing fields.
Reuters/Singapore
ExxonMobil has begun ramping up production at a new Indonesian oilfield, targeting peak output later this year of more than 200,000 bpd that will add to an already oversupplied crude market.
Output from the Banyu Urip field, part of ExxonMobil’s Cepu block in East Java, is crucial to Indonesia’s long-term efforts to meet rising domestic demand as production declines at ageing fields in the former member of the Organisation of the Petroleum Exporting Countries (Opec).
“We continue to see strong capacity results on the Banyu Urip wells and will continue to ramp up production until we reach peak field production of more than 200,000 bpd, later in 2015,” Erwin Maryoto, vice president of public and government affairs at ExxonMobil Indonesia, said in an e-mail response to questions late on Monday.
The oilfield was producing 75,000 bpd at the end of last month, ExxonMobil said during a conference call on April 30.
The Banyu Urip discovery in 2001 was one of the largest in Asia in the last 15 years, but disagreements between the US oil major and Indonesia’s state oil company Pertamina slowed its development.
The field will help Indonesia meet a target of producing some 830,000 bpd this year, up from output of just below 800,000 bpd in 2014. These figures are around half the country’s peak production in the mid-1990s.
Indonesia, an Opec member until 2008, was once self-sufficient in oil and gas but has been struggling for years to attract investment to halt declining output. The country’s energy minister said last week he would seek approval for the country to rejoin the oil cartel.
The first shipment of Banyu Urip crude, was lifted from the Gagak Rimang offshore storage terminal in April jointly by Pertamina, local government interests and the Indonesian government, Maryoto said.
Traders said they expect first exports from the field in the third quarter. The new production will add to a global oversupply of crude that triggered a drop in oil prices of more than 60% between June and January.
Banyu Urip is a light to medium waxy crude with very low sulphur content that will yield good output of diesel, kerosene and vacuum gas oil, which is used to make gasoline, ExxonMobil said on its website.
Recoverable resources at the field are estimated at more than 450mn barrels. At full production, Banyu Urip will be Indonesia’s largest oil project, ExxonMobil said.
