ExxonMobil, Pertamina commit to massive Banyu Urip oil field development offshore Indonesia

By Phaedra Friend Troy

US super-major ExxonMobil (NYSE:XOM) and Indonesian national oil company Pertamina have decided to move forward with a multi-billion dollar full development of the Banyu Urip oil field in the Cepu Block in East Java, Indonesia

Appraisal drilling results has increased the estimates of recoverable resources at Banyu Urip to 450 million barrels through a full development. 

After discovering the field in 2001, an early field development commenced limited production from Banyu Urip in 2009, reaching 20,000 barrels of oil a day.

“The excellent performance of the early production wells and facilities adds economic value to the overall project and is supportive of the Government of Indonesia's priorities to safely and effectively develop the Cepu Block oil and gas resources,” said Neil Duffin, president of ExxonMobil Development Company. 

The $165,000-barrel-a-day full field development will include 49 wells on three well pads, a central processing facility and 60-mile pipeline to transport the processed oil to a 1.7-million-barrel floating storage and offloading (FSO) vessel in the Java Sea. Tankers will then offload the oil from the FSO to transport the hydrocarbons to market. 

The first of five engineering, procurement and construction contracts has been awarded on the multi-billion dollar Banyu Urip project, which will bring the field into full development. According to a report from The Wall Street Journal, South Korea’s Samsung Engineering has won a $780 million contract to build the production facilities for the field. 

Pending regulatory approvals, construction is scheduled to span 36 months, and production start-up is expected soon afterward. 

ExxonMobil serves as the operator of the Cepu Block with 45 percent interest. Pertamina holds 45 percent working interest in the project, and four local government companies share the remaining 10 percent interest.

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