KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) has started production at the Bukit Tua oilfield in Indonesia on May 17, 2015.

“This is Petronas’ biggest upstream project in Indonesia so far. This project is an integrated development as it also involves the development of other supporting facilities such as Ratu Nusantara floating production, storage and offloading facility (FPSO), a 110km subsea pipeline and a 4.7ha onshore receiving facility (ORF),” Petronas general manager and country chairman of Indonesia operations, Hazli Sham Kassim, said in a statement yesterday.

Located in the Ketapang block, approximately 110km off East Java, the Bukit Tua field is expected to produce 3,700 barrels of oil per day (bopd) and two million standard cu ft of gas per day (mmscfd) in its initial production stage. Upon ramping up the field, the production will increase gradually before reaching its peak production capacity of 20,000 bopd and 50 mmscfd.

Petronas said the gas produced from the field will be transported through a pipeline to the ORF in Gresik, East Java, while the oil will be offloaded to carriers for export.

PT Petrogas Jatim Utama, owned by the East Java provincial government, has signed gas sale and purchase agreement with Petronas where it will purchase the gas produced from the field for electricity generation to meet Indonesia’s energy demand.

The Ketapang block is operated by Indonesian subsidiary of Petronas, PC Ketapang II Ltd, with an 80% interest in the block. The remaining 20% is held by state-owned PT Perusahaan Gas Negara Tbk through its subsidiary PT Saka Ketapang Perdana.

This article first appeared in The Edge Financial Daily, on May 27, 2015.