East Java as one of the oil and gas producing provinces begins to be considered at a national level after Riau and East Kalimantan provinces, that has large enough oil and gas reserves. When Riau and East Kalimantan is on decline phase of production, on the contrary East Java is on the rate of growth oil and gas with a number of oil and gas discoveries. East Java has about 28 blocks consist of 9 production blocks, 3 development blocks, and 16 exploration blocks. In early 2011, oil production and condensat at East Java was around 93,000 BOPD and gas production was 509 MMSCFD. The first gas flew used East Java Gas Pipeline (EJGP) that came from Pagerungan Field in 1994.
In order to increase revenue in the upstream and downstream of oil and gas, East Java Province considers the need of oil and gas owned enterprise (BUMD). Starting in 2003 the Governor and Regional Parliaments have conducted a special study on the preparation of the establishment oil and gas owned enterprise at East Java. In the short term, the East Java Provincial Government appointed Panca Wira Usaha (PWU) to form a subsidiary company engaged in oil and gas. Then on February 21, 2003 Petrogas Wira Jatim (PWJ) was born, East Java Owned Enterprise to get 10% Participating Interest (PI) at Cepu Block, Madura Offshore Block and Sampang Block.
Furthermore, a company-owned enterprise in East Java Province it’s been formed that is Petrogas Jatim Utama (PJU) which is based on Regional Regulation No. 1 of 2006 dated 9 March 2006 and Amendment by Law No. 3 of 2007 dated 26 April 2007 which states a company engaged in oil and gas from the upstream, downstream businesses, and supporting business as it refers to the Oil and Gas Law No. 22 of 2001
The overall purpose of the establishment oil and gas owned enterprise is to get any opportunities of oil and gas activity in East Java in both upstream and downstream, which in turn can help to increase local revenue from oil and gas sector directly outside Lifting to East Java Government.