Chevron says production target not realistic

Indonesia?s top crude producer PT Chevron Pacific Indonesia (CPI) will not be able meet crude production target 377,000 barrels per day in 2011 as set by the government.

CPI President Abdul Hamid Batubara told parliamentary hearing in Jakarta on Wednesday that the target set by the government was not realistic as the company is faced with a number of problems in managing its operations.

Batubara said that Chevron is currently producing at 359,200 BPD and the company has actually proposed production target of 352,000 BPD. ?That?s a realistic target,? he said.

Batubara said that CPI is faced with natural declining rate of 17 percent annually and the company is working hard to slow down the decline. In 2011, production decline is expected to be at the level of 5 percent compared to 2010 production of 376,000 BPD, he said.

CPI, which is a unit of US energy giant Chevron Corp. is faced with a number of problems including temporary gas supply stoppage due to pipeline leakage to its steam-flood facility in Duri last October ?Reservoir performance has yet back to normal level,? he said. Gas is used to produce steam to pump out heavy oil at Chevron?s Duri operations.

CPI is also having a hard time to drill a number of targeted development wells due to permitting and land acquisition problems. ?This year CPI may only be able to drill 432 development wells out of 461 planned, due to those problems,? he said, adding that until April 2011, CPI has drilled 145 wells.

CPI operates two blocks in Central Sumatra, namely Siak and Rokan blocks, which has been producing crude since more than five decades ago. (giok)