ASEAN KEY DESTINATIONS
New oil, gas deliveries to boost 2015 output
Dozens of oil and gas fields will make deliveries next year, helping to lift the country’s dwindling output from aging fields, the upstream oil and gas regulatory task force (SKKMigas) has said.
As many as 140,086 barrels of oil per day (bopd) are expected to flow from 23 ongoing projects that are set to be completed next year, according to SKKMigas.
In addition to the oil production, as much as 132.7 million standard cubic feet per day (mmscfd) of gas output is also expected from the new projects.
The combined output from the new projects is expected to bring the country’s oil production within the government’s target to 845,000 bopd next year, well within the government’s target. That compares with 818,000 bopd expected this year.
However, everything depends on the ramping up of the Banyu Urip field in the Cepu block in East Java.
“At this moment, Cepu is in the spotlight. The production ramp up can only happen if Cepu reaches its output peak in July 2015,” SKKMigas secretary Gde Pradnyana said on Thursday evening.
After previous delays, the Banyu Urip field at the Cepu block is expected to start producing more this August, according to Gde.
State-owned oil and gas giant PT Pertamina’s subsidiary, PT Pertamina EP Cepu and Mobil Cepu Ltd. (MCL) — a subsidiary of ExxonMobil Corp. — are both working to develop the Banyu Urip field at the Cepu block in Central Java.
The project, which is operated by MCL, currently has the capacity to produce around 29,000 bopd.
However, its peak production capacity can reach 165,000 bopd, which could be achieved in July next year. The field is currently under development for such a full-scale production. Banyu Urip is important for Indonesia, which has seen its oil output decline on the depletion of mature fields.
The declining production has forced Indonesia, a former member of the Organization of Petroleum Exporting Countries (OPEC), to import a significant amount of oil and its products, straining the country’s state finances.
Oil production was estimated to decline around 15 percent next year, according to Gde, which means existing fields would produce 614,000 bopd next year.
However, a number of well services, workovers and additional drilling are expected to decline.
With the combination of output from new projects and existing projects, as well as efforts to reduce the declining rate, Indonesia is estimated to see 845,000 bopd in total production next year. The estimate is well within the range of the government’s production target at between 830,000 bopd and 870,000 bopd.
As the country is faced with challenges of declining oil output amid an ongoing increase in demand, the government has been calling for increased exploration works to secure more hydrocarbon.
However, oil and gas companies have been complaining about obstacles in carrying out exploration, particularly prolonged permission processes.
The Indonesian Petroleum Association (IPA) president Lukman Mahfoedz said earlier that only 10 percent of drilling activities to find new hydrocarbon has been realized in Indonesia, creating worries about the country’s future production.
He added that the realization for exploration works was only $2 billion to $3 billion per year in the last four years, which is considered less than required.
“For development projects it’s only $3 billion to $4 billion. We need more spending if we want to see increased production,” Lukman said.
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