As oil lifting is set to fall short of its target this year, the government plans to require all upstream contractors to include enhanced oil recovery (EOR) activities in their development plans for various fields across the country. Indonesia’s oil lifting, the colloquial term for ready-to-sell production, reached 792,000 barrels of oil per day (bopd) in August, far below the full-year target of 815,000 bopd.
At the same time, gas lifting stood at 1.13 million barrels of oil equivalent per day (boepd), just slightly below the total target of 1.15 million boepd this year.
“We won’t be able to meet the oil lifting target of 815,000 bopd before the end of the year,” Energy and Mineral Resources Minister Ignasius Jonan told reporters on Thursday “But for gas, I believe we can surpass the target by 10 percent to around 1.2 million boepd.”
The governments plan is in the wake of the country’s shrinking oil reserves of 2,959 million stock tank barrels (mmstb) at the end of last year, from around 5,000 mmstb in the early 2000s, due to lack of new discoveries.
To slow down the decline, the ministry’s oil and gas director general Ego Syahrial has discussed the plan with SKK Migas to require all upstream contractors to conduct EOR activities from the initial development phase of the fields.
The government has estimated that 2.5 billion barrels of oil in reserves can be recovered through EOR activities by 2050. Till this time, contractors have proposed to conduct EOR activities by the time the oil fields have already been depleted, which means that the risks and costs are larger,” Ego said.
“So, we suggest all contractors implement EOR as early as possible by including it in their plan of development [POD].”
Ego explained that, in general, contractors could only exploit 20 percent of oil reserves in one field, which could be lifted to 40 percent by implementing the EOR in the initial phase of development. However, he also said that EOR could only be implemented in certain oil fields with remaining reserves of more than 50 million barrels and low-complexity geological conditions.
Furthermore, Ego said that his side would try to speed up the drafting of a new decree on open data systems, which will make oil and gas held data, including data on reserves, accessible online by registered viewers.
He expected such transparency could lure prospective investors to explore various oil and gas working areas, especially in the eastern part of the country. Indonesia currently has 128 oil and gas basins, 50 percent of which are located in the eastern regions.
“Of all oil and gas basins, there are 40 located in eastern regions that have yet to be explored. So if we’re talking about a strategy to boost the country’s production and reserves, we should be focusing on the potential in the east,” Ego said.
Investment in the oil and gas sector 'only reached US$4.8 billion in the first half of 2017, representing 21.6 percent of the full year target. Of the figure, contractors spent a mere $30 million for exploration activities, making it more difficult for the country to find new discoveries against the backdrop of declining oil production in contrast to ever-growing domestic consumption.
State revenues from the oil and gas sector also fell significantly to Rp 83.8 trillion ($6.2 billion) in 2016, from Rp 320.25 trillion'in 2014. Fortunately Indonesia has been able to collect Rp 92.43 trillion in revenues from the sector in the first nine months of this year, already surpassing last year’s figure, following a recovery in global oil prices.
Jakarta Post, Page-14, Friday, Sept 29, 2017
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