Oil and gas contractors give up
JAKARTA: Several contractors of oil and gas partnership contracts (KKS) said that they will not be able to accomplish oil and condensate production target, being set by government in 2011s state budget, reaching 970,000 barrel per day (bph).Those giant
JAKARTA: Several contractors of oil and gas partnership contracts (KKS) said that they will not be able to accomplish oil and condensate production target, being set by government in 2011s state budget, reaching 970,000 barrel per day (bph).Those giant KKS are PT Chevron Pacific Indonesia, Conoco Philips Indonesia Ltd, PT Pertamina EP and Total E&P Indonesie.Generally, almost all contractor face a natural problem of declining production since the well have been used for more than 40 years, said Deputi Finance of Executive Agency For Upstream Oil & Gas Business (BP Migas), Wibowo W. Wirjawan.Besides, as he added, there are also other non-technical problems that influence operational and production activities such as land overlapping, licenses and asset utilization.Not to mention the fact that such oil and gas is somehow limited by numerous regulation particularly with regard to sabotage principle, Law on Environment and Decree of Finance Minister on Exploration Tax and Management on Operational Goods. We will not be able to realize 970,000 bph target, he said in a hearing with the Houses Commission VII Wednesday evening.As a matter of fact, oil and gas KKS highly support the 970,000 bph production target. Yet, it does take time to solve all the barriers particularly those relating to other agencies such as forestry, environment and local government.President Director of PT Chevron Pacific Indonesia (CPI), Hamid Batubara said that Chevrons oil and condensate production target in 2011 is only 352,000 bph or lower than the target in 2011s state budget at 370,000 bph.As per May 2011, CPIs oil and condensate production was 359,000 bph considering several production problems particularly gas pipeline leakage in Grissik Duri, Riau, belonging to PT Transportasi Gas Indonesia (TGI) in October. After such accident, the reservoir has not yet operated in normal condition.Besides, the 80 years CPI area has resulted into 5% production decline from 2010 to 2011.As a matter of fact, the average production decline shall reach 17% supposes we are not doing anything to solve the old well problem. So far, we can raise production by 12%, making the average decline to 5%, he said.The other problems such as land acquisition, land overlapping and license have reduced well exploration target from initial target of 461 development wells and 5 exploration wells to only 432 wells by the end of 2012.Bureaucracy problemSimilarly, Total E&P Indonesie President Director and General Manager Elisabeth Proust said that the company scouts 86,400 bph production until the end of 2011 or lower than governments target at 94,000 bph.In the meantime, Conoco Philips Ltd Director and General Manager Jim W. Taylor said that budgeting cut including WP&B budget have influenced the production activity.Governments target at 61,000 bph is not realistic. The problem is that our budget is higher than the approved WP&B whereas with such WP&B, we can raise our production, said Taylor/.On the other side, PT Pertamina Upstream Director Muhammad Husein said that generally, the company still attempts to realize such oil and condensate production target, reaching 208,100 bph certainly with the support from many parts in minimizing the barriers.General Manager PHE West Madura Offshore Imron Asjhari said that since West Madura offshore serves as the oil and gas operator, the company is optimistic to produce up to 20,000 boh oil and condensate until the end of this year.The target is 13,660 bph and at the moment our outlook is around 15,400 bph. Until the end of the year, we shall raise it up to 20,000 bph, said Imron. (t02/msw)
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