PT Pertamina estimates the production will be 910 thousand barrels of oil equivalent per day (MBOEPD) this year - Photo: Pertamina

JAKARTA (TheInsiderStories) – Indonesia’s state-owned oil and gas PT Pertamina estimates the production will be 910 thousand barrels of oil equivalent per day (MBOEPD) this year, the company said on Tuesday (11/19). The target will be in the range of 923 MBOEPD in 2020, which is a year of take-off for Pertamina’s long-term plan 2020-2026.

“Pertamina’s oil and gas production has shown an upward trend since the 2015 period. This year is expected to reach 910 MBOEPD, relatively stable from last year’s production achievement,” Pertamina Upstream Director, Dharmawan H. Samsu, said in a written statement.

He added, currently the company through its upstream subsidiaries manages the fields which the majority have been producing for a long time and are included in the category of mature fields with natural decline rates reaching 50 percent.

According to him, holding back the rate of natural decline is a major challenge that has been managed well. This is evidenced by the ability of these fields to survive to produce at a rate of drainage in the aggregate which is much lower, even close to 0 percent.

Oil and gas are non-renewable energy, and all fields will surely face a rate of natural production decline,” he explained, adding the current work area management strategy is carried out by creating a second life cycle creation for the mature field.

“Maintaining a stable rate of decline against the rapid natural rate of decline shows the magnitude of significant efforts achieved through intensive innovations,” he said.

For 2021, he went on, Pertamina is targeting production in the range of one million barrels of oil equivalent per day and is targeted to continue to increase in the following years.

The increase in its production is supported by several strategic projects undertaken by the company. It includes the Jambaran Tiung Biru (JTB) project which will be the driver of the economy by responding to the need for gas supply for the industry.

The project, which is undertaken by Pertamina’s upstream subsidiary PT Pertamina EP Cepu (PEPC), has entered the Gas Processing Facilities (GPF) construction period. Until the second quarter of 2019, the project has progressed 25 percent and is faster than the target. Currently, JTB has absorbed 2,000 workers with 70 percent of the local workforce.

“This project is very important and strategic to drive the national economy. PEPC continues to accelerate as Pertamina’s commitment to optimize oil and gas production and reserves while improving the welfare of the community in the operational area,” said Samsu.

Natural gas is an alternative energy source from fossil fuels that are environmentally friendly and economical. With sufficient gas supply, the domestic industry will be able to operate more efficiently by up to 30 percent, he continued.

With a gas production capacity of 192 million cubic feet per day and 2.5 trillion cubic feet (TCF) reserves which will be channeled through the Gresik – Semarang gas pipeline, the JTB project will provide a multiplier effect in overcoming the supply deficit for 19 industrial sectors in Central Java and East Java.

PEPC also succeeded in making capital expenditure efficiencies of US$509 million so that gas prices are cheaper and revenues from the state and contractors increase. The project, which is projected to be completed in the second quarter of 2021, will also contribute to increasing state revenue to $3.61 billion.

Another project is the Cilacap’ refinery joint venture which has not yet reached an agreement with Saudi Arabian Oil Co. (Aramco). If an agreement is not reached, the government prepares other options so that Aramco can still invest in the country.

Djoko Siswanto, acting director-general of oil and gas, revealed that the government is preparing an alternative offer to Aramco to build a new refinery facility. The government, he said, did not rule out opportunities to invite Aramco to choose a new location for the project, and was invited to find partners or develop independently.

The Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Panjaitan previously revealed that if the agreement never reached, Pertamina could continue to work on the Cilacap refinery independently.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com