Ramba Energy to begin oil production in Sumatra's Lemang block from Nov 16

RAMBA Energy has been given the forestry lease permit for oil and gas exploitation on the Akatara Field in the Lemang block in Sumatra, Indonesia.

With this, it will start first oil production on Nov 16, with initial output estimated to be around 500 barrels of oil per day from the Akatara-2 well, the group said on Tuesday.

Ramba will be doing so in partnership with Mandala Energy - backed by private-equity firm KKR - and Eastwin Global Investments, which is wholly owned by Indonesia-listed PT Sugih Energy Tbk.

Mandala had obtained a 35 per cent participating interest in the Lemang production sharing contract from Ramba's subsidiary PT Hexindo Gemilang Jaya.

Said Ramba CEO David Soeryadjaya: "The production of first oil at Akatara Field is a significant milestone for Ramba, and in the light (of the fact) that this is the first new oil production in a while, it is a milestone on its own to the Indonesian oil and gas industry."

He added: "While the current oil price environment is benign, we are optimistic about the commercial potential of the Lemang block given its relatively low operating and capital cost structure."

The firm said the development will not have any material impact on its earnings per share or net tangible asset per share for the current financial year.