Oil and Gas Sector To Reach 1 Million Barrels

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Blok Rokan. ANTARA/HO-SKK Migas
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NUSADAILY.COM – JAKARTA – SKK Migas together with contract contractors with the support of ministries and other agencies starting this year will step up gas production of one million barrels of oil per day by 2030 through aggressive drilling.

“If the 2030 target is achieved, then the upstream oil and gas sector will record the largest oil and gas production record in Indonesia’s history,” said Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto in a statement in Jakarta on Tuesday.

According to him, the achievement of production of one million barrels of oil per day (BOPD) and 12 billion standard cubic feet of gas per day (BSCFD) by 2030 is equivalent to 3.2 million barrels of oil equivalent per day (BOEPD).

The previous peak production occurred in 1998 of 2.9 million BOEPD.

Dwi said that the achievement of production in 2030 will also be an important stage to meet oil and gas needs in accordance with the national energy general plan (RUEN) in 2050.

In RUEN, by 2050 oil needs are projected to increase to 3.97 million BOPD and 26 BSCFD gas.

“This confirms that increasing oil and gas production is necessary in order to sustain the energy needs and industrial raw materials in a sustainable manner,” he added.

Dwi also said that in 2020 is a difficult time for upstream oil and gas due to the impact of the COVID-19 pandemic and overshadowed by low world oil prices.

However, SKK Migas remains committed to maintaining upstream oil and gas contribution to the national economy.

Drilling on the Rise

SKK Migas Deputy Planning Jaffee Suardin said drilling is key to increasing oil and gas production and reserves in Indonesia.

Going forward, the number of wells drilled will continue to increase by 20-30 percent per year.

“Hopefully, by 2025 to 2030 the number of wells drilled is about 1,000-1,100 wells per year,” he said.

He is optimistic because there is still a lot of potential for production increase. Of the 128 basins, only 20 are produced and 68 have not been explored.

Investors are also ready to increase investment in Indonesia if they get the right incentives and stimulus.

Jaffee said the realization of drilling wells development in 2020 as many as 268 wells.

In 2021, SKK Migas encouraged drilling to increase to 616 development wells.

“For workover activities targeted as many as 615 wells and well service also increased to 26,431 wells,” said Jaffee.

Oil lifting in 2021 is targeted at 705,000 BOPD and 5.6 BSCFD gas.

To achieve this, Indonesia needs to invest USD250 billion (Rp3,528 trillion) or USD25 billion (Rp352 trillion) per year.

“This investment is absolutely needed upstream oil and gas to conduct exploration, development, and production activities. Therefore, at the same time we also need the certainty of trying for investors,” he said.

Dwi also said that SKK Migas has prepared four strategies to pursue the production target.

Namely, maintaining existing productions; acceleration of resources into production; application of enhanced oil recovery (EOR); and massive exploration activities.

“The four strategies are intertwined, so they must all meet the targets set,” he said.

Meanwhile, ESDM Minister Arifin Tasrif said the government has made several policies including lower gas prices to encourage industrial growth, taxation easing and fiscal system flexibility to increase the attractiveness of oil and gas investment, as well as improve the economy of field development.

The Ministry of Energy and Mineral Resources has also reduced investment uncertainty by simplification of licensing, provision and disclosure of data, and upstream-downstream integration and fiscal stimulus.

“The government no longer prioritizes the amount of revenue sharing for the country, but encourages oil and gas projects to run through the incentive of several plans of development (POD) that are considered un economical by contractors,” said Arifin. (lal)