Indonesian energy and mines ministry expected Banyu Urip field project in Cepu oil block is to commence production of crude oil in August, raising the country's dwindling oil output, an official said here on Friday.

Energy and Mines Ministry Jero Wacik disclosed that the output would scale up gradually in coming months, and the government and parliament revised upward oil lifting (after sold) target this year.

Wacik revealed that the first production would reach 40,000 barrels per day in August and would double two months later.

"The output would scale up to 80,000 barrels per day in October," he said at the central bank headquarters.

The country's oil lifting target this year has been raised to 818,000 barrels per day as it was approved by the parliament and government on Thursday, according to Wacik.

The rise of the production from the block, which is located in the border of Central and East Java, would persist till next year, he said.

"The peak of production will be from March to April with production of 160,000 barrels per day. The production in Cepu block will increase oil lifting target next year," he added.

With the hike, the parliament and government raised oil lifting target next year to about 870,000 barrels per day, the previous target being 818,000 barrels per day, the minister said.

Cepu block is managed by Mobil Cepu Ltd, Ampolex Cepu Pte Ltd, PT Pertamina EP Cepu and four provincial enterprises.

Indonesia is scrambling to lift oil outputs which has been dwindling due to aging wells and lack of realization of exploration activities amid relatively low fresh investment.

Indonesia has proven oil reserve of 3.7 billion barrels and 104 trillion cubic feet of natural gas, according to the country's oil and gas upstream regulatory body, SKK Migas. Endi