Government aims to maintain oil output at 800,000 bpd for five years

The government is preparing short-term program as it aims to maintain the country?s oil output at more than 800,000 bpd over a five-year period amid declining production rate of aging fields.

This was said by Vice Minister of Energy and Mineral Resources Arcandra Tahar in a statement on Friday issued following a meeting with oil and gas contractors operating in the country.

He said that to achieve the oil production target, the ministry is formulating short-term program whose implementation requires close cooperation with upstream oil and gas authority SKK Migas and the oil and gas contractors.

Arcandra said that oil fields in Indonesia are generally aging, with production rate declining by an average of 11 percent. On the other hand, the government wants to increase oil production, but given the absence of new large fields, it?s difficult to be realized. ?Production from new fields (developed) now will only start in 15 years. Meanwhile, this program is a five-year program. So what to do? We want quick program, five years. It?s called short-term program. This is what we discussed with the oil contractors. We want the lifiting to be above 800,000 bpd. This requires good cooperation between the ministry, SKK Migas, and PSCs,? he said referring to the production sharing contractors.

The short-term program, he said, firstly will try to identify available technologies that can increase oil production in short period. ?We want to see the type of technology, the success story, and look into their characteristics whether it?s suitable for fields in Indonesia,? Arcandra said, adding that the commercial aspect of the technology will also be assessed to make sure that the cost does not exceed the expected returns.

He said that once the technology has been identified, the ministry will hold workshop participated by all PSCs to formulate work program to be implemented in five years. The short-term program is expected to be implemented from 2018 until 2022.

The country?s oil production last year stood at 831,000 bpd, while gas at 7,939 mmscfd. The figures are larger than the target set under the work program and budget of SKK Migas at 817,500 bpd and 7,813 mmscfd, respectively.

Editing by Reiner Simanjuntak