Oil, gas exploration lower than expected<\/p>\n
Leony Aurora, The Jakarta Post, Bandung<\/p>\n
Despite the soaring oil prices, exploration activities in
\nIndonesia remain low at between 60 percent and 75 percent of the
\nplans submitted to the government, which seems to indicate less
\nenthusiasm from the players in the sector.<\/p>\n
Two-dimensional seismic monitoring had covered 10,371
\nkilometers (km) as of Nov. 28, compared to the planned 17,207 km
\nand 13,497 km in the previous year, chairman of the Upstream Oil
\nand Gas Regulatory Agency (BP Migas) Kardaya Warnika said over
\nthe weekend.<\/p>\n
While three-dimensional seismic monitoring this year was
\nrecorded at 3,944 km, higher than the 2,606 km last year, but
\nonly around 75 percent of the 2005 plans. Some 62 exploration
\nwells were drilled throughout the year, but 81 were planned.<\/p>\n
"The intensification of exploration activities are not on a
\npar with the high number of new working areas (signed)," Kardaya
\nsaid at a press briefing on the sector's performance this year.<\/p>\n
"This shows that most new players are not prepared for the
\nhigh-risk, capital-intensive activities (of exploration)."<\/p>\n
Last year, the government signed 19 production sharing
\ncontracts (PSCs), comprising to 16 new ones and three extensions.
\nThis year, Indonesia has signed 11 new PSCs and five extensions,
\nand there are plans to make public the results of this year's
\nregular tender of blocks in late December. Most of the
\ncontractors awarded with blocks through the direct-offer
\nmechanism in October were local newcomers.<\/p>\n
Indonesia is in dire need of new oil discoveries as output, of
\nwhich 88 percent is produced by mature fields, is continuing to
\ndecline. The country has averaged 1.06 million barrels per day
\n(bpd) in output of crude and condensate this year, slightly lower
\nthan the target of 1.075 million bpd forecast in the revised
\nstate budget for 2005.<\/p>\n
As of Nov. 28, the daily average output was 1.061 million
\nbarrels, Kardaya said.<\/p>\n
"Some fields shut down for maintenance and we also faced tight
\ncompetition to secure equipment as everybody wants to look for
\noil amid the soaring prices," said Kardaya, citing other reasons
\nfor the below-target production.<\/p>\n
"(The output) is still within an acceptable range from the
\ntarget," he added.<\/p>\n
According to BP Migas data, gas production this year also
\ndeclined by 3 percent to 8.16 billion cubic feet per day (bcfd)
\nfrom 8.41 bcfd recorded in 2004.<\/p>\n
As of January 2005, Indonesia's proven oil reserves were
\nrecorded at 4.1 billion barrels, lower than 4.3 billion recorded
\nat the same period the previous year, while proven gas reserves
\nwere at 97.3 trillion cubic feet (tcf) and 94.8 tcf,
\nrespectively.<\/p>\n
Throughout this year, contractors discovered total reserves of
\n134.6 million barrels of oil and 3.6 tcf of gas.<\/p>\n
Most of the new discoveries were made in current production
\nareas, while the deep sea and untouched basins, many in less-
\ndeveloped eastern parts of Indonesia, remain untouched.<\/p>\n
To boost exploration in the virgin areas, which can only be
\ndone by major multinational oil firms with sufficient money to
\nspend, BP Migas suggested that existing major companies form a
\nconsortium to pool their budgets and expertise.<\/p>\n
"The consortium may be presented with incentives for going
\ninto unexplored basins," said Kardaya. "Without going there
\n(virgin areas), we won't develop much," he added.<\/p>\n
BP Migas has already conducted talks with the government and
\noil companies, said Kardaya, without mentioning a specific
\ntimeline for the plan to materialize.<\/p>",
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"sponsor": "Okusi Associates",
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