Exxon Mobil Corp. is readying to ramp up oil production from Indonesia’s largest oil-producing onshore block—the Cepu Block located in Central and East Java.

The Irving, Texas-based oil major plans to boost production from Cepu to 235,000 barrels per day (bbl/d) of oil over the next two years, up from the average 216,000 bbl/d in 2019. Exxon Mobil is currently awaiting approval from regulators for the increase in production, said Muhammad Nurdin, vice president of the company’s Indonesian subsidiary.

“High rate tests (HRT) have been carried out and submitted the revised EIA (Environmental Impact Assessment) documents [for approval],” Nurdin said after a recent briefing at the parliamentary committee on energy.

The existing environmental clearance permits the developer to produce 220,000 bbl/d of oil from the Cepu Block in East Java, which, at present, has two oil-producing fields—Banyu Urip and Kedung Keris.

ExxonMobil Cepu Ltd is the operator with 45% participating interest in a PSC for Cepu Block that is valid till 2035. PT Pertamina and a group of local government agencies own 45% and 10% respectively.

The operator conducted high rate tests for six months, from June to November last year—in the dry and wet season—to test the ability of the existing production and processing facilities at the Cepu asset to increase crude oil production from the two fields while focusing on safety and reliability of the operation.

Regulator Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) chairman Dwi Soetjipto confirmed that during the high rate tests, the two Cepu assets were able to produce oil up to 235,000 bbl/d safely. The production capacity of Banyu Urip was rated up to 225,000 bbl/d of oil.

Banyu Urip currently produces around 211,000 bbl/d of oil from over 30 production wells. Kedung Keris, a tie-in to Banyu Urip, pumps 5,000 bbl/d of oil. The latter is located 14 km (8.69 miles) from the producing Banyu Urip Field.

The expansion plan comes closely after the discovery of new proven oil reserves in and around Banyu Urip Field, which is estimated to be more than double the previous one.

“This means the peak of the field will be longer than the Banyu Urip Field prediction during the POD (plan of development),” Nurdin said.

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Banyu Urip is estimated to have in place oil reserves of more than 1.2 billion barrels of oil within the Oligo-Miocene carbonate and Middle-Miocene clastic reservoirs. Kedung Keris field, discovered in 2016, is estimated to have reserves of 20 million barrels of crude oil.

The two fields make Cepu Indonesia's largest oil-producing asset, accounting for around 25% of the country's total.

The Indonesian government has identified Cepu Block as one of 13 priority projects to boost oil and gas production in the country. The entire block is estimated to have in place oil reserves of more than 709 billion barrels.

In addition, the onshore Cepu concession has several significant oil and gas discoveries which include Jambaran-Tiung Biru, Alas Tua East, and Alas Tua West. A separate plan is being considered to develop sour gas reserves in the Jambaran-Tiung Biru Field.

Production from Cepu fields will help Indonesia meet a target of producing 1 million bbl/d of oil by 2025.

Energy and Mineral Resources Ministry stated that the output from the Cepu Block is crucial to Indonesia’s long-term efforts to meet rising domestic demand and check the falling production of the aging fields.

Indonesia, a self-sufficient nation in oil and gas until a few years ago, has been struggling to halt declining output. The local oil fields currently produce around 775,000 bbl/d of oil against the demand of more than 1 million bbl/d of oil. The production figures are around half the country’s peak production in the mid-1990s.

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