Indonesia is wooing investors at home and abroad to spend more exploring and developing the country’s oil and gas reserves as it struggles to meet output targets.
Total investment in the oil and gas industry is expected to grow 58 percent to $18.9 billion next year from an estimated $11.95 billion this year, said Haposan Napitupulu, planning deputy at upstream energy regulator BPMigas.
Around 9 percent of the total investment, or $1.24 billion, will be spent on exploring new oil and gas blocks next year, BPMigas said in a statement. Another 63 percent will allocated for production and 22 percent for development.
The government’s production target next year is 970,000 barrels of oil per day, Haposan said, up from 965,000 this year.
Chevron Pacific Indonesia, the local unit of the global oil major, plans to open a new resource block next year. BPMigas said this week that Area 13 in CPI’s North Duri project on Sumatra Island could produce up to 40,000 barrels per day.
CPI produces 380,000 bpd, or around 45 percent of Indonesia’s total production of crude oil.
Haposan said the country would not meet its output goal this year due to accidents, which he called “unplanned shutdowns.”
Oil production this year reached 947,000 bpd as of Dec. 8, but BPMigas head Raden Priyono said accidents resulted in a loss of 263,000 barrels. A gas pipeline operated by Transportasi Gas Indonesia in Duri, Riau, sprang a leak in November that was initially estimated to cost 500,000 barrels, though that total was later revised downward.
Haposan said companies must make innovations in order to boost their production next year.
“Chevron, for instance, they have failed to extract oil from four wells,” he said, a lapse that reportedly resulted in $400 million in losses.
Raden said the success rate of drilling activities this year was only 73 percent.
State energy company Pertamina, meanwhile, said it would revisit old wells next year and was expected to produce 132,000 bpd. The president director of Pertamina Hulu Energi, Dwi Martono, said Pertamina also planned to purchase 9,000 bpd next year to cover fuel demand.