CNOOC Supplies Gas to PHE ONWJ for Production Increase

Jakarta– CNOOC SES has agreed to deliver one billion British thermal unit of natural gas per day to PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ). This buy-sell agreement was signed by CNOOC President Director Duan Chenggang and PHE ONWJ President Director Tenny Wibowo in Jakarta on Monday (30/4).

Under the deal, the gas will be distributed for three years at the price of US$ 5.4 million British thermal unit. “The gas will be used to increase PHE ONWJ’s oil production,” said Tenny.

In this case, thus, the gas will be used to support the Zulu Flow Station power plant at the ONWJ Block. The electricity generated will be used to power the Electric Submersible Pump (ESP) at oil wells in the area. In the first phase, the Zulu area is expected to produce 400 barrels of oil per day before climbing up to 1,700 barrels per day by September 2012. Currently, the average oil production of PHE ONWJ stands at 31,000 barrels per day, while the government has targeted its production to reach 35,000 barrels per day. PHE ONWJ will continue make efforts to optimize its production and develop its exploration activities in the ONWJ Block. “This agreement is part of our efforts to optimize our production,” Tenny said.

Meanwhile, Duan expressed CNOOC’s support to the government’s effort in increasing oil productions. Furthermore, he said, prior to this deal, the gas allocated to PHW ONWJ was flare gas. Hence, this deal is seen as an effort to reduce gas flaring.

“The government will also earn revenues from this agreement,” said Gde Pradyana, BPMIGAS Head of Public Relations, Security and Formality Division. (ACU)

Caption: CNOOC President Director Duan Chenggang (left) dan PHE ONWJ President Director Tenny Wibowo (right) signed a gas buy-sell agreement in Jakarta on Monday (30/4). (Bpmigas, Edited by Topco)