US supermajor ExxonMobil (NYSE:XOM) is planning to increase its investment in Indonesia’s giant Cepu Block by $170 million.
The investment is expected to increase oil output by 20,000 barrels per day. Director General of Oil and Gas at the Energy and Mineral Resources (ESDM) Ministry Tutuka Ariadji said ExxonMobil and its partners struck a deal with upstream regulator SKK Migas to increase its investment by more than $170 million, reported local media.
In September, ExxonMobil said that it was planning to restart exploration drilling at its giant Cepu Block in Indonesia, despite rumours that it is looking to divest its interest, in a bid to find new reserves. Cepu, which holds the Banyu Urip project, one of Southeast Asia’s biggest oil developments, is Indonesia’s largest oil producing block.
Total output from the Cepu Block, which started up in 2016 and is Indonesia’s largest oil production area, hit 500 million barrels of oil, beating the target of 450 million barrels in the initial plan of development (PoD), SKK Migas said in October.
Based on recent technical studies, the Banyu Urip field reserves increased to 940 million barrels, an increase of more than double from the initial PoD estimate of 450 million barrels, said SKK Migas.
“At the beginning of the Banyu Urip POD, the plateau production period was estimated to last for about two years with an annual average production level of 165,000 barrels of oil per day (BOPD). Since the full facility started in January 2016, peak production can be achieved for approximately 5 years at 185,000 to 225,000 BOPD, including an additional 10,000 BOPD from the Kedung Keris field since December 2019,” added SKK Migas.