When the going gets tough, state-owned energy giant Pertamina gets going by maintaining its oil and gas production growth, especially from overseas fields, against the backdrop of falling domestic production. In the first half of the year. Pertamina’s oil and gas production stood at 692,000 barrels of oil equivalent per day (boepd), 8.12 percent increase compared to the same period last year.
During that period. the company produced 3-13,000 barrels of oil per day (bopd), climbing by 12.45 percent annually, and 2,022 million standard cubic feet per day (mmscfd) of gas, up 4.33 percent year-on-year.
“We expect to maintain this upward trend in the second half,” Pertamina spokesperson Adiatma Sardjito said on Tuesday in a statement.
Pertamina has allocated US$3.44 billion to support its various upstream activities in 2017, throughout which it aims to drill a total of 26 exploration wells and 129 development wells, reactivate 31 wells and undertake maintenance activities at around 5.000 wells. The companys biggest, production growth has come from its oil and gas fields overseas located in different countries and operated by subsidiary Pertamina Internasional EP (PIEP).
In the first six months. Pertamina’s overseas oil and gas production grew almost 30 percent annually to 152,000 boepd, while domestic production only climbed 0.2 percent to 540,000 boepd.
The foreign fields produced 104,000 bopd and 291 mmscfd of gas, increases of 23.8 percent and 47.7 percent, respectively. Pertamina has specifically pinned high hopes on production from France-based oil extraction and production company Maurel & Prom (M&P), which it acquired last year.
M&P is projected to maintain a production rate of at least 30,000 boepd of oil and gas from its assets, in Gabon, Nigeria and Tanzania. Pertamina has also sent a proposal to Iranian government-owned National Iranian Oil Company (NIOC) in February to develop two oil and gas fields in Iran, namely the Ab-Teymour and Mansouri fields.
The two fields are estimated to have 1.5 billion barrels of reserves each and are expected to produce 200,000 bopd each. Pertamina is also in discussion with Russian oil company Rosneft to acquire a 37.5 percent participating interest in the Russkoye field in and 20 percent in the Chayvo field in Russia. In the long run, it aims to boost its oil and gas production to 1.9 million boepd by 2025, 34.2 percent of which will come from its overseas fields.
Komaidi Notonegoro, the executive director of the Jakarta-based energy think tank ReforMiner Institute, said Pertamina had no other choice but to rely more on its overseas production as a result of declining national production from various depleted fields. Indonesia’s domestic oil production had fallen to 808,800 bopd as of June from 1.2 million bopd in the early 2000s.
The country has been forced to import around 60 percent of its current oil needs of 1.6 million bopd as a result of the lower production. The proven oil reserves had also dropped to 2,959 million stock tank barrels (mmstb) at the end of last year from around 5,000 mmstb in the early 2000s following a lack of new discoveries. Of the reserves, 55.45 percent was already depleted and there was only 3.95 percent that had not been developed.
“Looking at the current condition, it will be hard for Pertamina to rely on the existing depleted fields in the country,” Komaidi said.
It will need some time to explore and start production at new wells, but even the new wells may not reach their peak production by 2025. Komaidi said the government’s move to assign Pertamina to take over eight expired oil and gas blocks in the country next year might be another burden as the company would be expected to use the newly launched gross-split sliding scale.
Jakarta Post, Page-15, Wednesday, July 26, 2017
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