Lower oil prices are unlikely to deter Pertamina Hulu Energi from developing upstream projects off Indonesia, but it plans to keep costs under control.
Indonesia’s Pertamina Hulu Energi (PHE) looks set to press on with three new phased developments at West Madura Offshore (WMO) and Offshore North West Java (ONWJ) production sharing contracts in the country, even as project economics have come under review with oil prices falling below $50 a barrel in early 2015.
Of late, PHE – the upstream unit of state-owned PT Pertamina – is understood to have sounded out contractors for support towards reducing costs on further field developments at both ONWJ and WMO, which contribute over 80 percent of its domestic oil and gas production in 2013.
Negotiations have been held with participating contractors on the back of declining oil prices during the second half of 2014, contributing to a delay in the award of a turnkey contract tied to the development of four small fields – YY, FSB, KLD and SPA at ONWJ.
Offshore North West Java Contract Award Pending
Indonesia-based yard operator, PT Meindo Elang Indah is said to have emerged the frontrunner with a bid falling within PHE’s owner estimate of around $140 million for the contract before the New Year.
The contract includes four new structures – a tripod at the largest YY discovery, and three monopods at the FSB, KLD and SPA fields.
The final award is expected to take place within the first quarter if PHE presses on with the aim to bring the four fields onstream before mid-2016.
Working in a consortium with the Indonesian affiliate of Singapore-listed Swiber Holdings Ltd., Meindo has delivered another turnkey contract for the GG field in ONWJ.
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