The producers and the Special Task Force for Upstream Oil and Gas Business Activities agreed the oil and gas lifting in 2021 stayed at 705,000 barrels per day and gas lifting of 5,638 million standard cubic feet per day in 2021 - Photo by SKKMigas Office

JAKARTA (TheInsiderStories) – The producers and the Special Task Force for Upstream Oil and Gas Business Activities (SKKMigas) agreed the oil and gas lifting in 2021 stayed at 705,000 barrels per day (BPD) and gas lifting of 5,638 million standard cubic feet per day (MMSCFD) in 2021, said the head today.

Earlier, the oil lifting assumption in 2021 was proposed in the range of 677,000 – 737,000 BPD or dropped around 2.38 – 10.33 percent compared to the 2020′ target of 755,000 BPD. The agency projects that there will be drilling of 200 wells in the Rokan Block to maintained the targets.

Head of SKKMigas, Dwi Soetjipto in a joint hearing with parliament, PT Chevron Pacific Indonesia also plans to invest in the Rokan Block in this year. The drilling will take place before Chevron’ contract expires in August 2021.

The block is estimating to produces 5,000 BPD during 2021 and 2022. The average oil production of the Rokan Block is estimating 170,000 barells of oil per day. He conveyed that there are challenges to achieving this production target such as the pandemic, low oil price, the aggressiveness of the oil and gas investment power, the absorption capacity of piped gas and liquid natural gas, and investment certainty in the Rokan Block by Pertamina or Chevron.

Previously, minister of energy and mineral resources, Arifin Tasrif, projected that oil and gas lifting production ready to sell in 2024 could reach 2.06 million barrels of oil equivalent per day. The projection comes from the development of existing oil and gas wells.

For 2023, its expected that there will be additional oil lifting from the Ande-ande Lumut field in Northwest Natuna Island by 25,000 BPD and the Indonesia Deepwater Development project in Makassar, South Sulawesi of 23,000 BPD in 2024. The body has cut this year’ oil and gas production outlook amid the low demand.

In the first quarter of this year, said Soetjipto, the oil production stood at 701,600 BPD from same period in 2019 at 746,000 BPD and gas lifting about 5,866 MMSCFD from previous year 7,000 MMSCFD.

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.

Written by Editorial Staff, Email: theinsiderstories@gmail.com