Oil, gas Projects Expedited to Meet Lifting Target

    The oil and ,gas special task force plans to speed up the approval of development projects in the upstream industry and boost investment in a bid to meet the government’s national lifting target. As of November, there were 28 plans of development (POD), plans of further development (POFD) and put-on-production (POP) proposals approved by the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) since the beginning of this year with an estimated total investment value of US$ 2.94 billion.

    Those 28 development projects are expected to increase the country’s oil and gas reserves in the future, with an additional capacity of 142.45 million barrels of oil (MMBO) and 645 billion standard cubic feet (bscf) of gas. Meanwhile, state revenue from the projects is expected to reach $ 6.85 billion. “There are 23 other POD that are still in the pipeline. We expect to approve three out of the 23 next Week [this week] so that 31 approved development projects can be achieved by year-end,” SKK Migas spokesperson Taslim Z. Yunus previously said.

Among the 28 projects, 13 proposals came from the country’s largest oil producer Chevron Pacific Indonesia in a bid to further develop various fields in its Rokan blockin Riau. Meanwhile, 10 proposals came from Pertamina ER an upstream subsidiary of state-owned oil and gas giant Pertamina, to develop various blocks, including the Muara Tanjung Una field in East Kalimantan and Jatibarang field in West Java. The three proposals that are expected to be approved this week come from local firm Bumi Siak Pusako to develop Coastal Plains Pekanbaru block in Siak, Riau. “All of the approved projects this year are expected to be on stream  during the period of 2016 to 2020.

    A POFD tends to be faster because it is already located at a producing field, while the POD will take much longer as it needs to complete the development of production facilities first,” Taslim said. All of the 28 projects so far are estimated to contribute 35.8 percent to the country’s oil and gas reserve replacement ratio (RRR), or the newly discovered receives compared to production. Meanwhile, by taking the other 23 projects in the pipeline into account, the RRR will reach 59.7 percent.

    As of November, Indonesia’s oil and gas lifting figures, or domestic ready-to-sell production, surpassed the original target stated in the revised 2016 state budget, the first time since 2008. At that time, the oil lifting reached 821,800 barrels of oil per day (bopd), slightly higher than this year’s target of 820,000 bopd. Whereas gas lifting reached 6,643 million standard cubic feet of oil per day (mmscfd), surpassing the target of 6,438 mmscfd.

    Such positive results were attributed to the oil lifting from Cepu block in West Java operated by United States oil and gas company ExxonMobil Indonesia. Cepu, which currently produces 185,000 bopd, is the second-largest source of oil in the country, which began operations at the beginning of this year, even though it was initially slated for production in 2008. Moreover, it also aims to increase the investment value in the oil and gas upstream industry to around $ 13 billion in 2017 from this year’s $ 12 billion. Most of the figure will be used for oil and gas production.

    Next yean the government aims to lift 815,000 bopd and 6,439 mmscfd of gas in a bid to collect tax and non-tax revenues from the oil and gas sector of Rp 101.93 trillion ($ 7.5 billion). To meet the target, SKKMigas is putting high hopes on the Sidayu 4V exploration well in the offshore Pangkah block in Gresik, East Java. The recently discovered oil and gas source, operated by Saka Energi Indonesia, is believed to have reserves amounting to a 300 million barrels of oil equivalent (BOE). Several oil and gas fields are expected to be on stream next year, including the Matindok field in Central Sulawesi with a capacity of 800 bopd and 65 mmscfd and the Jangkrik field in East Kalimantan with a capacity of 200 bopd and 450 mmscfd.

Jakarta Post, Page-10, Tuesday, Dec, 27,2016