Upstream Oil and Gas Investment in Indonesia Year 2014

migas 2014

Upstream Oil and Gas Investment in Indonesia Year 2014

Upstream oil and gas investment in Indonesia year 2014 is targeted to reach US$ 25.64 billion. The details are,

  • US$ 3.84 billion for exploration activities,
  • US$ 1.6 billion for administrative matters,
  • US$ 5.3 billion for development, and
  • US$ 14.9 billion for production.

migas 2014

It’s increased 32 percent compared to the realization of investment in 2013 of $ 19.342 billion.

This amount is in line with the discussion on work program and budget (WP&B) between the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) and the contractors (KKKS).

The plans of activities to be performed are among others,

  • 2D seismic survey of 9,020 kilometer (km),
  • 3D seismic survey of 11,633 km²,
  • drilling of 205 exploration wells,
  • drilling of 1,364 development wells,
  • work-over of 932 wells, and
  • well services of 33,060 wells.

The realization of investment in 2013

The realization of investment in 2013, a sum of US$ 1,877 billion was spent for exploration activities, US$ 1.199 billion for administrative matters, US$ 4,306 billion for development, and US$ 11.96 billion for production.

Challenges to the Increase of Production

The State Budget of 2014 has targeted oil lifting of 870,000 barrels per day and gas lifting of 7,175 million British thermal unit per day (bBtud). This number of volume is equal to 2,110,000 barrels of oil equivalent per day. The state revenue target from oil and gas sale is US$ 30.6 billion.

[Dalam Anggaran Pendapatan dan Belanja Negara (APBN) 2014 ditargetkan lifting minyak sebesar 870.000 barel per hari dan lifting gas bumi sebesar 7.175 juta british thermal unit per hari (BBTUD). Jumlah ini setara 2.110.000 barel ekuivalen minyak per hari. Target penerimaan negara dari penjualan migas tersebut sebanyak USD30,6 miliar.]

This government’s oil and gas production target is higher than the result of discussion on 2014 WP&B estimating oil lifting of 804,000 barrels per day and gas lifting of 6,853 bBtud.

The gap of this production target has become a challenge to oil and gas industry in 2014.

SKK Migas has prepared some steps to take on any challenges.

  1. Handling of any operation disruption problem is the first step. The efforts are by reducing any failure in the production and drilling operations in order to achieve additional production and by facilitating the settlement of project problems.
  2. The second step is reducing unplanned shutdown. This is implemented by among others by evaluating any details of production facilities maintenance plan and improving the supervision of production facilities.
  3. Furthermore, handling of sharp decline rate is another step to take by ensuring the well-timed schedule of development well drilling and by optimizing the development process.
  4. The fourth step is overcoming any obstacles in land clearing and permits. In this case, SKK Migas will be directly involved in the land-clearing process, and will keep the land-clearing schedule in timely manner, and endeavor and encourage the settlement of Service Level Agreement (SLA) with respect to permits and licenses.
  5. Last step is overcoming procurement obstacles by updating business process in the procurement system and increasing the accountability and good governance.

Abbreviation

SKK MIGAS – Special Task Force for Upstream Oil and Gas Business Activities Republic of Indonesia (Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi or “SKK Migas”), SKK MIGAS is an institution established by the Government of the Republic of Indonesia through Presidential Decree (Decree) No. 9 of 2013 on the Implementation of Management of Upstream Oil and Gas.

KKKS – Kontraktor Kontrak Kerja Sama (KKKS) is a party that has a Cooperation Contract with the Government of Indonesia (SKK Migas), a permanent establishment or the holder of rights management in a Block or Work Area has the right to conduct exploration activities, oil and gas exploitation in Indonesia.

Pictures:

Picture courtesy of http://www.esdm.go.id/ and http://nasional.sindonews.com/

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