TEMPO.CO, Palembang - Oil production in South Sumatera has declined significantly compared to the 1980s era when the province served as one of top oil producers in the country.

Tirat Sambu Ichtijar, the head of the South Sumatera branch of the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas), said that one of the factors contributing to the declining production was the land acquisition issue.

"Land as one of the main production factor is getting more difficult to acquire," Tirat said on Wednesday, July 1, 2015.

Tirat revealed that the average oil production in South Sumatera reached 72,000 barrels per day, decreasing from 75,000 barrels per day. Currently, land prices in South Sumatera are skyrocketing due to high demands for rubber and palm oil plantations.

In addition, oil and gas contract holders must deal with certain extortionists causing production costs to soar. Therefore, SKK Migas called on contract holders to use the cluster system.

Among contract holders operating in South Sumatera, particularly in Musi Banyuasin, is ConocoPhillips Indonesia. Joang Laksanto, the Vice President Development and Relations of ConocoPhillips Indonesia said that his company had faced similar difficulties when running the production session.

"Such hindrance will definitely affect production," Joang said.

PARLIZA HENDRAWAN