The Upstream Oil and Gas Executive Agency (BP Migas) has predicted that Banyu Urip oil field in the Cepu block in Bojonegoro district, East Java, will start production as early as late August 2009.
The construction of a 32-km pipeline from Palang to the crude oil collecting facility owned by Petrochina at Mudi had been completed, BP Migas Deputy Chief Abdul Muin said here on Monday.
"The construction of the problematic pipeline has been completed," he said.
Muin said the agency was now waiting for the completion of a mini refinery owned by PT Tri Wahana Universal (TWU) with a capacity of 6,000 barrels per day.
The construction of the refinery had yet to be completed as the contractor still had to wait for equipment from the United States, he said.
"The refinery equipment is likely to arrive in the third or fourth week of July. The equipment will later undergo a two-week commissioning test. So it will start production only at the end of August," he said.
The start of the oil field`s production estimated at 20,000 barrels per day (bpd) has been several times delayed as some parts of the project are behind schedule.
Earlier, the government has targeted that the oil field would start production late last year.
The Cepu block is expected to see its peak production of 165,000 bpd in 2012 or 2013.
Because of the delay in the start of the oil field`s production since January 2009, BP Migas had lost a potential revenue of US$150 million, Muin said.
Three factors had caused the delay, including slow land clearance and a natural disaster in Houston, the United States.
The House of Representatives Commission VII overseeing energy and mineral resources, research and technology and the environment has set up a team to address the matter
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