JAKARTA (TheInsiderStories) – Indonesia SKK Migas cut this year’ oil and gas production outlook to 725,000 barrels per day (bpd) and 5,727 million cubic feed per day (MMCFD), respectively, amid the low demand, said the official today (04/16). In the 2020 State Budget, the government targeting the oil lifting could reached 750,000 bpd and gas 5,886 mmcfd.
In the first quarter of this year, chairman of upstream oil and gas regulator (SKKMigas), Dwi Soetjipto said, the oil production stood at 701,600 bpd from same period in 2019 at 746,000 bpd. While, gas lifting stood at 5,866 MMCFD from previous year 7,000 MMCFD.
In the latest report, Rystad Energy seen Indonesia’ oil and gas will most likely fall in 2020 despite the official projections of a combined 8 percent growth year-on-year. According to the senior analyst, Prateek Pandey, the oil production from mature assets is expected to decline by about 37,000 bpd in this year.
“Out of the eight fields starting up in 2020, only Malacca Strait Phase 1 is an oil play and will not on its own replace the declining production from Indonesia’s mature fields,” He adds.
Because of this and the delays to some projects that were set to start producing in 2019, maintaining last year’ levels of oil production might be difficult to meet growth targets set by SKKMigas. On the gas side, he rated, the government arm has forecast a 12.4 percent output growth, targeting production levels of 6.67 MMCFD in 2020.
Pandey estimated that this year’ production will instead fall to 5.87 MMCFD from 5.93 MMCFD in 2019. For combined oil and gas production to grow, state-owned energy firm, PT Pertamina, which operates several significant producing blocks in Indonesia, has to clear many hurdles to lift its output in 2020.
Pressure on the national oil company is mounting as the Mahakam and Rokan fields have both witnessed higher decline rates since they were awarded to the company in 2018. The start of production from the Eni-operated Merakes field will certainly boost Indonesia’ gas output, but the real impact of this field will not be felt until at least 2021.
With no major oil projects in the pipeline, oil production will continue to decline until Pertamina drills further on the Rokan block. He concluded, “Given this lacklustre outlook, its imperative for Indonesia’ oil and gas production that Pertamina reduces sanctioning hurdles that have long delayed many of its projects and implements advanced enhanced oil recovery technology on its mature fields.”
The SKKMigas targeting to lift the national oil production up to one million barrels per day by 2031 and needs investment around US$6 billion to reach those targets. Based on the agency data, there will be 42 main developments up to 2027 with a total investment of $43.3 billion.
The projects are divided into 23 offshore projects and 19 onshore projects. Later, the projects are expected to contribute to oil production of 92,100 bpd and 6.1 billion MSCFD.
Edited by Staff Editor, Email: email@example.com