Indonesia’s Cepu oil project – which is critical to the country meeting its 1 mbpd oil output target by 2015 – remains mired in construction delays, but ExxonMobil and upstream regulator SKK Migas are upbeat that it will ramp up and reach peak production of 165,000 bpd in 2014.

The project’s stumbling blocks centre around delays in the award and execution of engineering, procurement and construction contracts.

Erwin Maryoto, ExxonMobil Indonesia’s vice president for government affairs, told Platts last week that the project faced schedule pressures in some areas, but he said the company was working with contractors and SKK Migas to identify ways to maximise 2014 production.

“The project has met many milestones including roundbreaking in December 2011 and the commencement of drilling, with Indonesian-constructed rigs in May 2013,” Maryoto said. “The project is currently around 50 per cent complete.”

SKK Migas Secretary Gde Pradnyana also said there were several problems hampering Cepu’s second-phase development but was upbeat it would hit peak production in 2014.

“The main problems with Cepu block’s developments were land acquisitions and permits from local government, and these have nothing to do with technical issues,” Pradnyana said, adding that the regulator and operators are “running fast” to achieve peak production in 2014. The Cepu oil project took a long time to get off the ground due to protracted negotiations between Pertamina and ExxonMobil over issues including equity split and operatorship of the block.