CPI cannot increase production, RI wants OPEC not to increase quota

Minister of Mines and Energy Susilo Bambang Yudhoyono said the Indonesian government hoped that the Organization of Petroleum Exporting Countries in its next ministerial meeting in Geneva on Sept. 9 and 10 would not again increase production ceiling because Indonesia faced difficulties to meet the current quota increase.

"Indonesia wants OPEC not to easily increase its quota if not really necessary," said Susilo Bambang after accompanying President Abdurrahman Wahid in a meeting with Venezuelan President Hugo Chaves Frias on Saturday.

The minister said that if OPEC would again increase its production ceiling in its ministerial meeting in Geneva next September, it would burden Indonesia.

"Frankly speaking, if that happens, we have to revive old marginal wells, and to do that the government needs to provide more incentives," he said.

In their last meeting in Geneva on June 21, OPEC ministers agreed to increase production by 708,000 barrels per day (bpd) of crude to a total of 24.7 million bpd. Out of that total increase, Indonesia gets 37,000 bpd to a total 1.317 million bpd.

Meanwhile, Indonesia's largest oil contractor PT Caltex Pacific Indonesia (CPI) said that it faced difficulties to increase its production level as asked by the government in a bid to meet the increase in Indonesia's export quota of crude.

CPI president Humayunbosha said the company's crude production level for July even dropped to 707,000 bpd, down from its annual production level of 743,000 bpd.

"That's because of reservoir constraints and other problems," Humayunbosha said. "So, our production level now is below our target."

Therefore, CPI could not contribute to the increase in crude oil output to meet Indonesia's increase in crude oil export quota.

"But at the end of this year, we hope that our production will increase," he said. He added that the company would still rely on its two main oil fields, namely Duri field that produces 285,000 bpd to 290,000 bpd and the Minas field that produces 168,000 bpd.

Pertamina has appointed seven of its production-sharing contractors to increase their crude production to meet Indonesia's crude oil export quota.

Pertamina spokesman for foreign contractors Siddick Nitikusumah said that the seven contractors included CPI, Santa Fe Jabung Ltd., YPF-Maxus Indonesia, Unocal, Conoco Indonesia Ltd., Gulf Resources Indonesia, and local contractor GFB Intan Camar.

Siddick said that Indonesia's crude output as of August 10, stood at 1.291 million bpd, slightly increasing from 1.276 million bpd in the previous week.

Meanwhile, Pertamina's director for exploration and production Gatot Karyoso Wiroyudo said he was optimistic that Indonesia would be able to meet its quota of 1.317 million bpd this month.

He noted the drop in CPI's production level would be temporary, and other contractors would also be able to force production increase in near future. Therefore, by the end of this month, Indonesia would meet the export quota increase.

Meanwhile, prices of a basket of OPEC crude has been increased by US$1.24 to US$28.17 from the previous week level of US$27.46. (*)