Coordination key to upstream oil and gas operations

By Godang Sitompul

A key problem detrimental to efforts of achieving national oil target has been identified by the government, which later introduced Presidential Instruction No.2/2012 on strengthening coordination among state institutions to meet oil target of 1.01 mbopd by 2014.

While it would mark a reverse from years of constant decline, with this year?s target set at 930,000 bopd, the target is actually lower than an earlier production target pledged by then minister of energy and mineral resources minister Darwin Zahedy Saleh of 1.2 mbopd by 2012, an annual forum held to support upstream oil and gas operation revealed in Bandung on May 15.

Agung Wicaksono, Deputy to the Head of President's Delivery Unit for Development Monitoring and Oversight (UKP4), told the forum that it showed that coordination is a much bigger problem on the field and beyond the PSC Holders? control. Delays in permits from relevant institutions are the prime example of the lack of coordination.

?That?s why UKP4 thinks it?s important to improve coordination among ministries and other relevant state institutions so that all can focus on ensuring the smooth upstream oil and gas activities,? Agung said.

In principle, he added, the new regulation aims to strip relevant institutions off respective sectoral ego and make national oil production a priority and joint responsibility.

Agung points out as examples cases where operations are stalled because of delays in getting environmental permits from the Environment Ministry, in settlement of overlapping operation from Forestry Ministry, permits for offshore vessels from Transportation Ministry. Others include detrimental policies from regional governments on building a pipeline network, difficulties in land acquisition, etc. Agung is hoping that the regulation could remove the real causes of those various obstacles.

Separately, Rudi Rubiandini, Deputy of Operation at upstream authority BPMIGAS, calculated that due to those external issues, the country could lose another 20,000 bopd in production this year, with problems involving technical problems with equipments potentially taking another 10,000 bopd off the total production.

That means, he said, if problems like that are not solved immediately, Indonesia could only produce 900,000 bopd this year.

However, he said, BPMIGAS is working together with the PSC holders and relevant institutions to help solve those issues, and help slow down the decline, which usually at 4 percent a year, to around 1 percent.

?So if last year production reached 902,000 bopd, then this year at the minimal we have to produce 890,000 bopd. Of course it would be great if we can produce more.?

Editing by Dadan Wijaksana