Government proposes higher oil lifting next year

Minister of Energy and Mineral Resources Sudirman Said proposed higher oil lifting target in the 2016 state budget draft at 830,000-850,000 bpd.

The minister made the proposal during a hearing session with the House of Representatives Commission VII on energy and mining on Tuesday discussing economic assumptions of the state budget draft, the ministry?s Directorate General of Oil and Gas said in a statement.

The higher oil lifting target for 2016 is based on the assumption that production at Banyu Urip field in the Cepu Block, located in the border of Central and East Java, will jump to 161,000-165,000 bpd next year, from this year?s target of 99,600 bpd. As per May of this year, production stood at about 47,200 bpd, the statement said.

The 2015 state budget assumes an oil lifting target of 825,000 bpd. But production as of May was lower at 752,000 bpd as oil and gas contractors cut down production amid the lingering weak global oil price.

While some lawmakers expressed doubt that the proposed 2016 oil lifting target can be met particularly with regards to overly optimistic production scenario for the Cepu Block, Amien Sunaryadi, Head of the Upstream Oil and Gas Regulator SKK Migas, said that there is possibility that the output target at the block can be achieved as the main production facility is scheduled to start operating next month. ?I?m confident it (Cepu production target) can be realized,? he said.

The statement said that the proposed 2016 oil lifting target is based on production of the ten main oil and gas production sharing contractors operating in the country including Chevron Pasific Utama, Mobil Cepu Ltd, PT Pertamina EP, Total Finaelf E&P Indonesie, Pertamina Hulu EnergiONWJ Ltd, CNOOC SES Ltd, PC Ketapang II Ltd, Chevron Indonesia Company, ConocoPhilips Indonesia Inc.Ltd, and Petrochina International Jabung Ltd.

Elsewhere, Sudirman proposed other 2016 state budget economic assumptions including Indonesia Crude Price assumption of US$60-80 per barrel, gas lifting of 1.1-1.2 million boepd (downs from 2015 target of 1.22 mboepd).

Editing by Reiner Simanjuntak