150,000 bpd Crude to Resume this Week

Indonesian crude production of 150,000 barrels per day (bpd) is expected to resume in the coming week after a leak in a gas pipeline supplying power to the Duri and Minas oilfields has been fixed, a government official said on Monday.

The ConocoPhillips pipeline, carrying gas used to generate power for crude production by Chevron and state energy firm Pertamina in Sumatra, leaked last Wednesday. Traders said the short-term disruption had little market impact so far.

"The leak at the pipe has been fixed yesterday and Conoco has resumed gas delivery this morning," an official at energy watchdog BPMIGAS told Reuters.

"We expect normal production can be reached within a week, but the government wants output to be resumed to normal levels as soon as possible," said the official, who declined to be identified.

Output of Sumatran light crude, including Minas, has been cut to 80,000 bpd from around 180,000 bpd normally, while Duri crude production – shared by Chevron and Indonesia – has been cut by a quarter to 150,000 bpd.

"The output cut still remains the same level as before, because Chevron has used some diesel generators to pump oil," the BPMIGAS official said.

An official at Chevron's Indonesia unit declined to comment.  

"We have to wait to see how production is coming back" to determine how much supply is lost, said a crude trading source familiar with the outage, adding the short-term disruption was not likely to have a large market impact as the producers have enough oil in storage.

Another trade source said end users have completed November spot purchases and the impact may only be felt when trading of December crude starts later this month.

Minas is a light sweet crude used as a regional benchmark. Duri is a direct-burning sweet heavy crude that is often used by Japanese utilities for power generation because it does not require refining.

Indonesia produced 961,800 bpd of oil in August. The drop in production comes as the former OPEC member struggles to meet its 2010 target of 965,000 bpd of crude and condensate production.

Based on Reuters Africa materials