149 Contractors fail to meet exploration commitment

Upstream oil and gas regulator BPMigas said 149 oil and gas contractors still failed to meet their exploration commitments. For this reason, the regulator will summon the contractors to seek clarification, the Jakarta Post reported today.

Currently, there are 202 contractors operating in Indonesia being in the exploration stage, 23 are working in the coal bed methane (CBM) sector, while 179 contractors are looking for oil and gas.

?Only 30 of the 179 contractors have fulfilled their exploration commitments. We?ll summon the remaining 149 contractors to ask them the reasons why they have done nothing in their work areas,? Hardiono said.

He said some contractors were waiting for new investors to fund exploration and would sell some shares in their working areas to acquire funds for the next stage of exploration, he added.

Government monitoring of contractors compliance with exploration commitments was weak, Hardiono said, adding that in the future the agency would be strict in monitoring contractors.

Hardiono said that the government would no longer give leeway to companies that failed to meet requirements, given the country?s need to increase oil production.

Indonesia?s oil replacement reserve ratio (RRR) was 41 percent in 2010, Hardiono said, down from 71 percent in 2009 and 84 percent in 2008. ?The 41 percent RRR means that the country is only finding 0.4 barrel of oil to replace every one barrel of oil taken,? he said.

The ministry?s independent Production Improvement Controlling Team (TP3M) reported earlier that oil and gas contractors drilled only 58 exploration wells in the first seven months of 2011, about 33 percent of a planned total of 176 wells.

The team said problems in acquiring permits and land have hampered contractors in executing drilling plans. As of last week, Indonesia?s oil production was only 905,000 barrels per day (bpd), far below the target of 945,000 bpd. (*)