Doubts linger over govt's oil production target<\/p>\n
Leony Aurora, The Jakarta Post, Bandung<\/p>\n
Analysts and industry players have expressed a wide range of
\nviews over the government's target of raising the country's oil
\nproduction to 1.3 million barrels per day (bpd) by 2009, with
\nsome saying it would be challenging and others saying it would be
\ndownright impossible.<\/p>\n
The government needed to come up with new breakthroughs and
\nout-of-the box thinking if it wanted to attain the optimistic
\ntarget, the panel of speakers and prominent members of the
\naudience said at a symposium titled \"To raise Indonesia's oil and
\ngas production\", which was held here by the Association of
\nPetroleum Engineering Experts (IATMI) last Friday.<\/p>\n
Such approaches had to be taken to encourage exploration, which
\nhad more than halved since 1998 as investors waited for the
\ncountry's turmoil to subside and for the implementation of the
\nnew Oil and Gas Law, president of Chevron Pacific Indonesia (CPI)
\nWahyudin Yudiana said.<\/p>\n
\"It's a pity that we could not raise production amid the
\ncurrent high oil prices,\" said Yudiana, whose company produces
\nsome 50 percent of Indonesia's total crude output.<\/p>\n
The government could offer incentives to promote joint
\nexploration in eastern Indonesia, where most of the unexplored
\nbasins are located, to major existing producers like Chevron,
\nExxonMobil, ConocoPhillips and BP.<\/p>\n
\"If one major find is discovered, the areas around it will
\nbecome attractive,\" said Yudiana.<\/p>\n
Panelist TN Mahmud, former CEO of Arco Indonesia, suggested
\nthat the government form a crisis team that would report directly
\nto President Susilo Bambang Yudhoyono to coordinate efforts to
\nboost exploration and restore investor confidence.<\/p>\n
The target of 1.3 million bpd by 2009 is unrealistic, he said.
\n\"We have lost the momentum in recent years,\" said Mahmud. Even if
\nthere were coordinated national efforts taken right away, the
\nresults would only become apparent five years down the track.<\/p>\n
It would be impossible to repeat the experience of the late
\n1960s, when, within five years, the oil and gas sector saved the
\nstate budget after the country faced near bankruptcy. The Local
\nAutonomy Law and investors' disappointment with the state's
\nfailure to honor the sanctity of the contract in the past were
\ncited as being among the reasons for this.<\/p>\n
According to figures from the Upstream Oil and Gas Regulatory
\nAgency (BP Migas), some 80 percent of crude and condensate
\noutput, which this year is estimated to average at 1.075 million
\nbpd, comes from fields that have passed their peak production.<\/p>\n
Indonesia's oil production is declining by 5 percent annually
\ndue to aging fields and lack of exploration.<\/p>\n
BP Migas chairman Kardaya Warnika said at the event that the
\nagency was making various efforts to boost production and called
\nthe government target \"quite difficult but not impossible\".<\/p>\n
In the next three years, the agency will fast-track
\nprocesses, applying special licenses that will enable some work
\nto start before the plan of development (POD) is approved and
\nproviding incentives for \"brown\" fields, said Kardaya.<\/p>\n
\"We will also speed up the development of the Cepu block and
\nconduct enhanced oil recovery efforts,\" he added, referring to
\nthe country's largest untapped oil reserves that are currently
\nthe subject of a prolonged dispute between state oil and gas firm
\nPT Pertamina and ExxonMobil.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/doubts-linger-over-govts-oil-production-target-1447893297",
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"sponsor": "Okusi Associates",
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