Mahakam Block - Photo by Special Task Force for Upstream Oil and Gas
JAKARTA (TheInsiderStories) — Indonesian oil and gas investment for upstream far from its target. According to official data, until third quarter (3Q) of 2018, investment in upstream business was US$8.76 billion, only 61.69 percent of the $11.2 billion target.
Some of the investment realizations are $18 million drilling, US$ 212 million oil and gas field development, and $428 million work redo. Even so, Special Task Force for Upstream Oil and Gas Chief, Amien Sunaryadi claimed to still positive under lower target.
“We are still optimistic that upstream oil and gas investment can achieve $11.2 billion,” he said.
Indonesia met oil and gas upstream investment peak in 2015, when $15.33 billion investment entered the business. But it was downturning years after, with $11.6 billion in 2016 and $10.27 billion in 2017. The slump caused by its long internal rate of return and legal assurance issue.
The main reason for the low investment, said Sunaryadi, there is no new attractive field available. Big amount of oil and gas reserve only found in Banyu Urip, Cepu block, East Java, and Jangkrik in Muara Bakau block, East Kalimantan.
Amid the downturn in the last few years, his quite confident for better oil and gas investment in 2019, supported by new contractors working commitment over terminated oil and gas blocks. One of the blocks is $239.3 million-worth owned by state-owned energy producer, PT Pertamina’s Jambi Merang that will be expired in 2019.
The company planned to invest up to $3 billion in upstream business next year. Pertamina is now prioritizing to maintain production is some fields.
It is also planned to invest more, regarding the needs of special technology, such as well drilling.
Next year, Pertamina targeted production for 414 thousand barrels a day, an increase from 400 thousand barrels a day this year. Until 3Q, Pertamina has absorbed $2.4 billion expenditure allocated for investment.
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