Oil and gas firm Pertamina Hulu Energi West Madura Offshore (PHE WMO) has begun the construction of two oil rigs off the coast of Madura, East Java, in an attempt to increase national oil production.

PHE WMO is part of state-owned oil and gas giant Pertamina.

The two offshore rigs, PHE-12 and PHE-24, are expected to boost national oil production by 40 per cent in 2019. At present, Pertamina only contributes 23 per cent to the total national oil production, which amounts to 830,000 barrels of oil per day (bopd).

Pertamina president director Dwi Soetjipto said the construction of PHE-12 – which will produce oil – and PHE-24 – which will produce gas – would be a new standard for the firm to explore and exploit oil and gas.

The integrated oil and gas production facilities will be equipped with the Central Processing Platform 2 ( CPP2 ), which is currently under construction in Cilegon, Banten, and will be shipped in mid-October.

The platform will then be installed offshore by the end of November.

Dwi said the new rigs were a milestone project as they extensively used local talent and locally made components.

"From the design to the construction, all will be done by local experts. The use of TKDN [local content] has reached 61.8 per cent. This is proof that we are able to design and build our own [rigs]," he said off the coast of Madura recently.

The use of local components also helped to cut costs.

R Gunung Sardjono Hadi, the president director of Pertamina Hulu Energi, which is the parent company of PHE WMO, said the integrated construction scheme would cost $457 million.

The scheme has been approved by the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas), according to its plan of development.