Exploration Committee identifies 5.2 billion barrels potential reserves
Tuesday, October 6 2015 - 03:00 PM WIB
The reserves consist of 2.7 billion barrels of oil and 14 trillion cubic feet (tcf) of gas. The potential reserves are identified in 108 structures (status January 1, 2015) of discovery wells which have been tested to contain oil and gas, but have yet to be elevated into national reserve status, the agency said in a statement on Tuesday.
?First meetings have been held with PSC holders who have the discovery wells in order to inventory problems that hamper the efforts to bring them (the potential reserves) into national reserves,? the agency said.
The agency was created by the ministry with tasks of increasing the national Reserve Replacement Ratio (RRR) to > 75 percent within five years by identifying new oil and gas reserves and accelerating the process of oil and gas discovery from six to ten years to three to five years starting from block award.
Aside from the 5.2 billion potential reserves, KEN has also identified oil and gas indications amounting to 16.6 billion barrels of oil equivalent in 120 structures (status January 1, 2015) of wells which have been drilled but have yet to be tested. The structures are not on the priority list of PSC holders for exploration due to various reasons. If the problems are solved within one to four years, the nation?s reserves will increase, according to the agency.
In order to accelerate explorations, KEN recommended the creation of one-stop licensing service for oil and gas investors, citing that the current licensing process is too time-consuming, complicated and costly. It recommends the directorate general of oil and gas handle the procurement of licenses for investors.
It cited as an example the block tender which the government is now doing through online system. The announcement of tender winners will be followed by contract signing. KEN recommended that prior to contract signing, the blocks must already have a Clear and Clean status, meaning the directorate general of oil and gas should have secured all licenses needed for the exploration of the blocks, such as forest land utilization permit (IPPKH), environmental permit, principle permit and location permit, as well as ensured that the blocks do not have problems related to land overlap and regulation overlap.
?As such, the contractors can immediately work after signing their contracts,? KEN said.
KEN also recommends the revocation of Governmental Regulation (PP) No. 79/2010 on recoverable operating costs and income tax in upstream sector, saying the regulation is a scourge for investors and counterproductive to exploration activities.
Editing by Johannes Simbolon