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Tuesday, October 18, 2016

Oil and Gas Production is Late, Energy Security Threatened



The success of exploration marked by the discovery of new oil and gas reserves that are suitable for commercialization does not necessarily reduce the complexity of the process in the upstream oil and gas industry.

After the exploration, there are several stages of activities that must be passed before oil or natural gas can be produced. In accordance with the agreement in the Production Sharing Contract / PSC, the first stage, the Upstream Oil and Gas Contractor prepare an oil and gas working area development plan after successfully finding oil and gas reserves.

The planning is needed so that oil and gas reserves contained in a work area can be optimized in the long term. After the submission of the first development plan (POD) I was approved by the Minister of Energy and Mineral Resources (ESDM), activities continued on the construction of production facilities, such as central processing facilities and pipelines.

In this stage, the availability of infrastructures such as roads and ports greatly influences the time span needed to build production facilities.

Not infrequently, the Upstream Oil and Gas Contractor prepares the infrastructure needed before building the production facilities. The step was taken if the location of the discovery of oil and gas reserves are in remote areas.

However, these efforts often face non-technical obstacles. In some cases, delays in the construction of oil and gas production facilities occur not because of technical reasons, but rather due to non-technical problems, such as licensing and land acquisition.

The domino effect will be created if there is a delay in the construction of production facilities. The findings of oil and gas reserves that were originally able to restrain the rate of decline in production, cannot be produced on schedule.

These conditions cause the loss of potential additional oil and gas production. As a result, Indonesia's energy security will be threatened because oil and gas production does not increase, while oil and gas consumption is getting bigger.

SKK Migas

"Support from all parties is needed so that non-technical constraints can be minimized and the oil and gas production process can be carried out more quickly," said SKK Migas Head of Public Relations, Taslim Z. Yunus.

The oil and gas production process which is carried out on time not only guarantees the availability of energy in Indonesia. Upstream Oil and Gas Contractors or investors can optimize their capital and human resources to carry out development activities. As development activities are carried out, Indonesia has the potential to increase the amount of oil and gas reserves, while increasing oil and gas production figures.

Koran Sindo, Page-5, Tuesday, Oct 18, 2016


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