ExxonMobil sets sights on 205,000 bpd from Cepu block

ExxonMobil wants to boost oil production from the Cepu block on Indonesia’s Java Island to 205,000 bpd, local media quoted the US super-major’s field manager, Rexy Mawardijaya, as saying.

While the block averaged 185,000 bpd in 2016, the operator wants to ramp up production from the Banyu Urip and Kedung Keris fields, Rambu Energy reported, citing local daily Bisnis Indonesia. ExxonMobil is currently conducting tests to see if existing facilities can handle an increase to 200,000 bpd, Mawardijaya told Bisnis Indonesia.

The Indonesian government has set a national production target of 815,000 bpd for this year, after output in 2016 topped 800,000 bpd for the first time for two years, the Jakarta Globe said. In December 2016, state news agency Antara said production for the first 11 months of the year had averaged 822,000 bpd.

ExxonMobil owns 45% of Cepu, through its local arm ExxonMobil Indonesia, while state-owned Pertamina holds 45% and four local government enterprises own the remaining 10%.

ExxonMobil Indonesia applied last year to the Forestry and Environmental Ministry for planning approval to increase Cepu’s production. In December 2016, the company’s vice president for public and government affairs, Erwin Maryoto, told the Jakarta Post that upstream watchdog SKK Migas had largely approved the proposed increase contingent upon the ministry’s permission.

The Banyu Urip field contains estimated reserves of more than 720 million barrels, according to ExxonMobil’s website, and has already exceeded originally planned peak output of 165,000 bpd. It began production in 2008.

Full production from Cepu block was a key reason why Indonesia’s total output in 2016 topped 800,000 bpd. Last year was the first time in three years that the government target was met.

Indonesia suspended its membership of OPEC in December 2016, less than a year after rejoining the organisation. This was because it declined to reduce production as part of OPEC’s decision to reduce members’ output to help global oil prices. OPEC had asked Indonesia to cut about 5% or 37,000 bpd in 2017.