JAKARTA (TheInsiderStories) – Indonesia’ production of both oil and gas will most likely fall in 2020 despite the official projections of a combined 8 percent growth year-on-year, said Rystad Energy in the latest report. The upstream task force (SKKMigas) has set an ambitious oil production target of 755,000 barrel oil per day (bpd) for 2020 from last year’ 746,000 bpd.
Rystad Energy’ senior analyst, Prateek Pandey predicted, the oil production of the Southeast Asia larges economy stands at 718.000 bpd. In total, production from mature assets is expected to decline by about 38,000 bpd in this year.
At the same time, assets in the ramp-up phase are expected to add 10,000 bpd. This indicates a shortfall of 37,000 bpd compared to SKKMigas’ target.
“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 projects that were set to start producing in 2019 –even maintaining 2019 levels of oil production might be difficult– let alone meeting the growth targets set by SKK Migas, he rated.
On the gas side, the government arm has forecast a 12.4 percent output growth, targeting production levels of 6.67 million cubic feed per day (MMCFD) in 2020. Pandey estimate is that production this year will instead fall to 5.87 MMCFD from 5.93 MMCFD in 2019.
For combined oil and gas production to grow, state 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.
“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,“ he concluded.
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 the official data, until the third quarter of 2019, Indonesia’ average oil production hovered at 750,000 bbl, oil lifting averaged 745,000 bbl daily and gas lifting gan average of 1.05 million british thermal unit (MMBTU).
Head of the taskforce, Dwi Sutjipto said, although the investment achievements in the 1H of 2019 are still far from the target, the realization of upstream oil and gas investment increased 16 percent compared to the same period the previous year worth of $4.5 billion.
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 BOPD and 6.1 billion MSCFD.
Regarding the monitoring of the main upstream oil and gas work program as of 1H 2019, there were 18 exploration wells drilling from a year ago 11 drilling and there were 135 wells compared to 1H of 2018 with 129 wells. In addition, there were 340 wells per June 2019 or an increase from 324 activities per June 2018.
Edited by Staff Editor, Email: email@example.com