SAMPANG—BD Field Project of Madura Strait Block, operated by the PSC Contractor, Husky-CNOOC Madura Limited (HCML) officially starts its operations. Deputy Minister of Energy and Mineral Resources (EMR), Arcandra Tahar officially marked the commencement of the project by the breaking of a clay water jug at the Floating Production Storage and Offloading (FPSO) in Karapan Armada Sterling III, located in Sampang Regency, offshore Madura, on Wednesday, 20 September 2017.

The event was attended by Vice Chairman of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Sukandar, HCML’s General Manager Huang Chunlin, and Sampang Regent Fadillah Budiono.

In his speech, Arcandra conveyed his appreciation to HCML and all related parties for the completion of this project.

“The production of this project also contributes to the increase in national oil and gas production,” he asserted.

The peak production of BD Field is 100 million standard cubic feet of gas per day (MMSCFD) and 7,000 barrels of condensate per day. Gas distribution to PT PGN (Persero) has been started since 26 July 2017. The gas is used by PGN to support industrial activities in East Java. Currently, gas absorption ranges from 30-40 MMSCFD while condensate absorption is at 3,000 barrels per day. “Production will increase gradually. It is expected that by the beginning of 2018, the peak production will have been achieved,” Arcandra added.

Based on the latest developments, the BD Field gas buyers are PT Inti Alasindo Energy for 40 MMSCFD and PT PGN (Persero) for 60 MMSCFD. PT Inti Alasindo Energy cooperates with Pertagas as a transporter to distribute BD field gas to the end users. “Hopefully this gas distribution to domestic buyers can indirectly help lift the regional economy,” Arcandra further said.

Arcandra asserted that the government, is committed to creating a favorable investment climate in this strategic industry. In addition to that, exploration and exploitation development activities at oil and gas blocks require huge investments and high technology, and they may carry high risks. One of the efforts to improve the investment climate is made through the revision to the Regulation of Minister of EMR on Gross Split to replace the current cost recovery scheme. This new policy scheme is expected to create a more efficient upstream oil and gas business in Indonesia. The realization of upstream oil and gas projects can also be faster. “The support of all parties, including the local government is extremely important," he said.

Arcandra stated that the local government is expected to help speed up the issuance of permits and not to issue regulations without having added value for the upstream oil and gas industry.

Huang Chunlin expects that additional gas and condensate production from BD Field could help strengthen the national energy availability. “This includes accelerating the pace of development in East Java in particular and Indonesia in general,” he said.

Fadillah Budiono stated that the upstream oil and gas sector should be able to generate benefits for the people in the region. “We are ready to give full support for the smooth running of the operations,” he affirmed.

HCML is a PSC Contractor of Madura Strait Block whose operation is under the supervision and management of SKK Migas. BD field, which is part of Madura Strait Block, is located in offshore Madura Strait of East Java, 65 kilometers east off Surabaya and 16 kilometers south off Madura Island. The BD Field gas wells in Madura are located around the Mandangin Islands area in offshore Madura Strait. The field is expected to produce 442 billion cubic feet of gas and 18.7 million barrels of condensate within 13 years. BD Field has 4 production wells. The gas from these wells is transported through the subsea pipeline to the Floating Production Storage and Offloading (FPSO). Gas is transported from FPSO through a 16-inch pipeline with a length of more than 52 km to HCML’s GMS (Gas Metering Station) in Semare Village, Pasuruan which is then delivered to gas buyers. (acu)