Oil and gas exploration down in 2003
Oil and gas exploration down in 2003
Fitri Wulandari, The Jakarta Post, Jakarta
Oil and gas exploration has slowed this year compared to 2002
because oil and gas companies have postponed high risk
explorations until next year and focused on development, a senior
official said on Tuesday.
However, revenue from the sector is expected to be on a par
with last year.
Rachmat Sudibyo, the head of Oil and Gas Upstream Regulatory
Body (BP Migas) said oil and gas explorations in 2003 only
resulted in 54 new wells, much lower than 102 in 2002 and 132 in
2001.
"Many oil and gas companies preferred to postpone drilling
activities until next year because the risks of exploration are
higher than the benefits," Rachmat told reporters in a press
conference on BP Migas performance in 2003.
Rachmat added companies opted to focus on developing their
existing oil and gas fields this year.
BP Migas was set up in 2002 following implementation of Oil
and Gas Law No. 22/2001. It takes control from state oil and gas
company PT Pertamina of the supervision of exploration and
production or upstream activities in the oil and gas sector.
Rachmat said exploration activities were expected to pick up
next year when companies carried out activities that had been
postponed.
According to Rachmat investment for exploration is expected to
increase to US$300 million in 2004, up from $207 million this
year.
Investment for developing existing oil and gas fields was
projected to increase to $1 billion in 2004 from $917 million
this year.
Revenue from the oil and gas sector was expected to reach
between Rp 70 trillion to Rp 80 trillion, at a similar level to
2002.
Rachmat said state revenue could be increased in the future
once new projects started production.
BP Migas has announced 10 new oil and gas projects which would
commence between 2003 to 2007. Some of the big projects are oil
fields in South Balam in Riau operated by Caltex which begun
operation this year and are expected to produce 55 million
barrels of oil (MMBO) over a 20-year period.
The Oyong oil and gas field in Sampang, Madura operated by
Australian firm Santos is expected to start operation in 2004
with a production of 5.7 million barrels of oil and 90 billion
cubic feet of gas (BCF) over a nine-year period.
American firm Amerada Hess will start operation in 2004 at
Ujung Pangkah gas field in East Java and is expected to produce
444 BCF of gas over 13 years.
Chinese CNOOC will start operation in 2005 in Southeast
Sumatra to produce 2.3 MMBO and 365 BCF of gas over 10 years.
"BP Migas would encourage investors to intensify their oil and
gas exploration activities," Rachmat remarked, adding that it
would expand the domestic market for natural gas and increase the
use of local products in oil and gas investment.
Up to 2003, Rachmat said, oil reserves stand at 9 billion
barrels, while natural gas reserves reach 176 trillion cubic feet
(TCF). The oil and gas reserves are projected to last for 20
years and 60 years respectively.