ASEAN KEY DESTINATIONS
Indo oil regulator questions production shortfall
“BPMigas will call the oil producers that failed to meet their production targets due to unplanned shutdowns,” BPMigas chairman Raden Priyono said over the weekend.
Unplanned shutdowns, he said, included halted production caused by aging facilities, power supply shortages, damage to pipelines and other problems.
The government’s oil production target for 2011 was 970,000 barrels of oil per day. After the first quarter, though, production had only reached 899,456 bpd, or 93 percent of the target, leaving a deficit of 62,355 bpd. Shortfalls in production force the government to import more oil or further tap its strategic reserves.
Ibrahim, an analyst at Harvest International Futures, said unclear contracts with the government, land acquisition problems and delays in drilling were the main culprits in the country’s falling oil production.
He pointed to the oil project in Cepu, Central Java, which has had problems with land acquisition and drilling delays by Chevron Pacific Indonesia.
“Aside from that, the government is still relying on old oil resources,” he said, referring to wells that have been explored for 30 years or more.
BPMigas released a document during the weekend that showed 30 percent of the first-quarter deficit was caused by unplanned shutdowns.
Out of 148 registered oil and natural gas companies in Indonesia, the document showed, 32 failed to meet their targets set in the 2011 state budget. Among them are state oil and gas firm Pertamina, Chevron Pacific Indonesia and ConocoPhillips Ind.
Government officials, including Coordinating Minister for the Economy Hatta Rajasa, have said Indonesia plans to reach 1 million bpd by 2012 at the latest. However, BPMigas and industry analysts panned the projection as being out of reach. The country did not meet its target last year, either, setting a goal of 965,000 bpd but only producing 954,000 bpd.
Pertamina EP spokesman Agus Amperianto said on Tuesday that the company was prepared to explain why it failed to reach its production target. He said unplanned shutdowns were not the only problem.
“The most important thing is overlapping when we try to drill more wells on our oil and gas blocks,” Agus said.
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