Mobil Cepu Ltd. Awards Contract for Banyu Urip Insulated Onshore Pipeline Facilities

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31 October 2011

Mobil Cepu Ltd., a subsidiary of Exxon Mobil Corporation, contractor for the Indonesian Oil and Gas Regulatory Body (BPMIGAS) for Cepu Block, is proceeding with full development of the Banyu Urip field in the Cepu Block onshore East Java. The Banyu Urip project has awarded the engineering, procurement and construction (EPC 2) contract for the design and installation of insulated onshore pipeline to a consortium agreement between PT. Inti Karya Persada Tehnik (IKPT) and PT. Kelsri.

The EPC 2 contract will design and install a 20-inch diameter buried insulated onshore pipeline from the production processing facilities (PPF) to the Tuban shoreline with a distance of approximately 72 kilometers.

Terry S. McPhail, President and General Manager of ExxonMobil affiliates in Indonesia, said, “We are working closely with BPMIGAS, Pertamina and our other co-venture partners to bring the Banyu Urip resources into full production as soon as possible, while ensuring safe and reliable operations.”
Full-field development is planned to produce 165,000 barrels of oil per day from facilities that include 49 wells on three well pads, a central processing facility, and a 95-kilometer long pipeline to transfer the processed oil to the 1.7 million barrel FSO unit. Tankers will load crude oil from the FSO for transport to domestic and world markets.

With the EPC contracts targeted to be completed within 36 months, the start-up of full field production will occur shortly afterwards, pending regulatory approvals. The project plans to recover approximately 450 million barrels of oil.

The development and future production of Banyu Urip will generate significant benefits for Indonesia. The drilling, construction, and installation of the facilities will be accomplished with the support of national suppliers, including a number of local companies. Several thousand Indonesians will be employed by Mobil Cepu Ltd. and its contractors during the approximately three-year development phase of the project. The project will also provide significant training opportunities for Indonesians to enhance skills and knowledge for future employment in oil and gas, services and other industries. Training is currently under way for local technicians who will be responsible for the production operations.

The Banyu Urip co-venturers initiated production in late 2008 and commissioned an early production facility in August 2009. The facility has demonstrated capacity of 20,000 barrels per day and has been operating reliably, with daily sales dependent on buyers’ demand.
Mobil Cepu Ltd. is the operator of the Cepu Block. Mobil Cepu Ltd. and Ampolex (Cepu) PTE. LTD., both subsidiaries of Exxon Mobil Corporation, hold a 45 percent interest in the block, with Pertamina EP Cepu holding a 45 percent interest and the Cepu Block Cooperation Body (BKS) holding a 10 percent interest.

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