National Oil and Gas Production Misses Target

TEMPO.CO, Jakarta - National oil and gas (migas) production is estimated to miss its target in the 2014 revised state budget because in addition to the natural decrease in oil reserves, there is no new discovery of new oil that supports production.

According to Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) chief Johanes Widjonarko, until the end of the year, migas production will only reach 794,000 barrels per day, which is under the target of 818,000 barrels per day.

However, Widjanarko said the natural decrease in reserves throughout this year is still under five percent. “If there are no efforts from us and contractors, the decrease can reach 15 percent,” he said on Tuesday.

Legal uncertainty also contributes to the small migas investment this year. Therefore, he supports the government’s effort to simplify the long licensing process. From 292 permits, the government will cut them to only 89 permits. “In the near future, there will only be eight to nine permits,” he said.

SKK Migas operation control deputy Muliawan echoed Widjanarko’s statement, saying that PT Pertamina is definitely unable to meet production target even though Pertamina contributes 20 percent to national production.

Pertamina acting managing director Muhamad Husen on Tuesday said the company’s production was decreasing. He estimated that production realization until the end of the year would only reach 94 percent of the production target of 554,000 barrels of oil equivalent per day (BOEPD), which means Pertamina’s production will only reach 520,760 until the end of the year.

According to Husen, the decreased production is caused by drilling difficulties throughout the year. The difficulties come from internal which is licensing and land acquisition issues and external which is bad weather during delivery.

AYU PRIMA SANDI