Eni told to submit plan before 2009

Ika Krismantari, The Jakarta Post, Jakarta

Italy-based oil firm Eni SpA risks losing the right to explore one of its blocks in Nangroe Aceh Darusallam if it fails to file an exploration plan with the government by 2009, an official says.

Kardaya Warnika, Upstream Oil and Gas Regulatory Agency (BPMigas) chairman, said Monday Eni had to present its Plan of Development (POD) for the exploration of the block, called Krueng Mane, before the 10-year time span allowed for its submission expires in 2009.

According to the relevant regulations, a block operator is given a period of 10 years to submit its POD to BPMigas, which has the right to revoke the contract if the operator fails to do so.

BP Migas could then offer the block to another company.

Eni secured a license in 1999 to operate the offshore block, in which it owns a 100 percent stake. The block is expected to produce gas to be supplied to fertilizer producers located in Aceh amid declining output from ExxonMobil's Arun LNG plant.

Figures from the Energy and Mineral Resources Ministry show that Eni had spent US$19.5 million on the offshore block to date.

When contacted by The Jakarta Post, Eni refused to comment.

The government has been pushing block operators to produce more oil as it wants to see a 30 percent increase in oil output by 2009.

Meanwhile, BPMigas's operations deputy chairman, Dody Hidayat, said the agency was awaiting the results of an oil-enhancing pilot project conducted by U.S. energy giant Chevron, using new technology.

Chevron is currently the country's largest oil supplier, producing around 414,000 bpd per year, over 40 percent of the country's total annual oil output of some 1 million bpd.

"If it succeeds, we will use it full scale in all Chevron's blocks by 2011. It (the new technology) is expected to provide additional output of up to 120,000 barrels of oil per day by 2018 or 2019," Dody said.