JAKARTA - Full-scale production at Indonesia's biggest oil find in a decade, the Cepu block, could be delayed by a year if Jakarta and ExxonMobil fail to resolve differences over storage facilities, an official of the oil major said on Friday.
The giant Cepu oil block, jointly developed by ExxonMobil (XOM.N: Quote, Profile, Research, Stock Buzz) and Pertamina, ranks among the U.S. major's top 10 projects worldwide, and any delay would be a blow to Indonesian plans to boost domestic crude output.
Cepu is scheduled to launch this December with volumes of 10,000-20,000 barrels per day (bpd), which will be refined domestically, said the official, who declined to be identified.
But full-scale production of around 165,000 bpd may be delayed from the scheduled date of 2011, as differences over oil storage facilities have still to be resolved, the official said.
Indonesian oil watchdog BPMIGAS has already approved an offshore floating storage and offloading unit as part of Cepu's oil production facilities, BPMIGAS deputy chairman Abdul Muin said.
But parliament members say the facilities are expensive and are pushing for an onshore terminal, Muin said.
"BPMIGAS has agreed previously about storage facilities. If the government wants to change this then there will be a risk," the Exxon Mobil Indonesia official told Reuters.
"If facilities for oil are delayed then full production that was already planned in 2011 may be delayed. That could be delayed for another one year. But we are still working according to the plan so far," the official added.
Indonesia, Asia-Pacific's only OPEC producer and the only member which is a net importer of oil, has struggled to maintain output as it has failed to tap new oilfields fast enough to compensate for older ones as they become less productive.
The government hopes that quick development of Cepu will help reverse Indonesia's shrinking oil output.
Pertamina estimates oil reserves in the main Banyu Urip field in the Cepu block at 350 million barrels, above Exxon's initial assessment of 250 million barrels.
Indonesia's crude oil production is likely to fall slightly to 862,200 bpd in September from 862,600 bpd in August. Its condensate output was expected to fall to 122,000 bpd in September from 125,000 bpd in August.
The giant Cepu oil block, jointly developed by ExxonMobil (XOM.N: Quote, Profile, Research, Stock Buzz) and Pertamina, ranks among the U.S. major's top 10 projects worldwide, and any delay would be a blow to Indonesian plans to boost domestic crude output.
Cepu is scheduled to launch this December with volumes of 10,000-20,000 barrels per day (bpd), which will be refined domestically, said the official, who declined to be identified.
But full-scale production of around 165,000 bpd may be delayed from the scheduled date of 2011, as differences over oil storage facilities have still to be resolved, the official said.
Indonesian oil watchdog BPMIGAS has already approved an offshore floating storage and offloading unit as part of Cepu's oil production facilities, BPMIGAS deputy chairman Abdul Muin said.
But parliament members say the facilities are expensive and are pushing for an onshore terminal, Muin said.
"BPMIGAS has agreed previously about storage facilities. If the government wants to change this then there will be a risk," the Exxon Mobil Indonesia official told Reuters.
"If facilities for oil are delayed then full production that was already planned in 2011 may be delayed. That could be delayed for another one year. But we are still working according to the plan so far," the official added.
Indonesia, Asia-Pacific's only OPEC producer and the only member which is a net importer of oil, has struggled to maintain output as it has failed to tap new oilfields fast enough to compensate for older ones as they become less productive.
The government hopes that quick development of Cepu will help reverse Indonesia's shrinking oil output.
Pertamina estimates oil reserves in the main Banyu Urip field in the Cepu block at 350 million barrels, above Exxon's initial assessment of 250 million barrels.
Indonesia's crude oil production is likely to fall slightly to 862,200 bpd in September from 862,600 bpd in August. Its condensate output was expected to fall to 122,000 bpd in September from 125,000 bpd in August.
