BPMigas considers selling crude stocks
Tuesday, September 29 2009 - 03:58 AM WIB
As of Sept. 4, Indonesia?s average oil production stood at 949,270 bpd, upstream oil and gas regulator BPMIGAS? Chairman, R. Priyono, said.
?We are evaluating the option of selling crude stocks, because otherwise the oil lifting target will be difficult to reach,? Priyono said.
The lower-than-targeted production was caused by several technical problems including production delays at the massive Cepu oil block situated on the border between East and Central Java, he said.
The block is operated by Mobil Cepu Ltd (MCL), a subsidiary of US-based oil producer ExxonMobil Corp. ?At the moment, the block produces 5,300 bpd,? Priyono said.
Some technical problems have also occurred in other oil fields, he said. Operations at state oil and gas company PT Pertamina?s Glagah Kambuna block in North Sumatra have been suspended because of problems at a power plant, Priyono said. The plant, operated by state power firm PT Perusahaan Listrik Negara (PLN), was preparing to receive gas from the block.
Priyono said the delay had reduced the oil condensate production by 3,500 bpd.
The shortfall was also caused in part by the Belida block, operated by ConocoPhillips, and the Sepanjang block, operated by Kangean Energy Endonesia Ltd (KEI).
The two blocks? production had dropped by 2,000 bpd each because of a leakage in their pipeline system, he said. While the government expects the output of the Cepu block to increase gradually, selling the country?s crude oil stocks was a more immediate solution to meeting the target, Priyono said.
Indonesia has some 11 million barrels of crude oil in stock, he said. ?We could sell 1 million [barrels] from stock each month,? Priyono said, adding that the sales may begin next month.
Energy and Mineral Resources Minister Purnomo Yusgiantoro said his office had ordered BPMigas to monitor fluctuations in the price of crude oil.
?We should release the stock when the crude price is higher than it is in the state budget assumption so we can get windfall profits.?
Under the 2009 revised state budget, the government and the House of Representatives set the Indonesian Crude Price (ICP) assumption at US$61 per barrel.(*)