Pertamina urges brief closure of high-cost wells<\/p>\n
JAKARTA (JP): State oil and gas company Pertamina will request
\nthat its contractors temporarily close high-cost oil wells in an
\nefficiency drive to compensate for the slump in oil prices.<\/p>\n
\"No oil fields will be closed but contractors will be asked to
\ntemporarily close some high-cost wells in their fields as part of
\nefficiency programs,\" Pertamina's head of supervision of foreign
\noil and gas contractors Gatot K. Wiroyudo said on Tuesday on the
\nsidelines of the seminar Oil and Gas Industry in the Reformation
\nEra.<\/p>\n
Dozens of the sector's executives attended the seminar.<\/p>\n
Gatot refused to reveal how many wells would be temporarily
\nclosed.<\/p>\n
The measure is also part of the government's effort to meet
\nthe country's output quota of 1.28 million barrels per day (bpd),
\nset by the Organization of Petroleum Exporting Countries (OPEC).<\/p>\n
Prices have dropped to the one digit level over the past week
\nfollowing OPEC's failure to formulate measures to stop the
\ndecreasing trend in oil prices since early this year.<\/p>\n
Sumatran Light crude, also called Minas, and Duri crude were
\nquoted at US$9.60 and $8 per barrel respectively last week.<\/p>\n
Minister of Mines and Energy Kuntoro Mangkusubroto has called
\non the country's oil industry to boost efficiency to maintain
\nenough margins for themselves and the government amid the price
\nslump.<\/p>\n
Kuntoro reiterated the call at the seminar.<\/p>\n
\"We need to find ways to raise our efficiency and reduce
\ncosts,\" Kuntoro said in his speech read by his expert staff for
\noil and gas affairs Rachmat Soedibyo.<\/p>\n
According to Gatot, production costs of the country's oil
\nwells currently average between $2.5 and $3.5 per barrel but some
\nwells, especially in remote areas, have production costs,
\nincluding overheads, of more than $7 per barrel.<\/p>\n
Gatot said oil contractors were also expected to reduce costs
\nconcerning benefits of the pending deregulation in the
\nprocurement of services and equipment and deregulation in the
\nlicensing of operations.<\/p>\n
Pertamina will also request that contractors use state-of-the-
\nart technology, which could reduce costs, and create synergy
\namong contractors in their operations, including through joint
\nproduction facilities.<\/p>\n
Gatot targeted savings on production costs of up to 35 percent
\nin the coming years thanks to the efficiency programs.<\/p>\n
Pertamina is also devising measures to reduce oil and gas
\nindustry overheads, Gatot said, but guaranteed the overhead-
\nreduction program would not lead to layoffs. (jsk)<\/p>",
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