Government?s oil lifting target of 849,000 bpd seen unrealistic

The oil lifting target of 849,000 bpd for this year as set by the government in the revised 2015 state budget, although lower than the 900,000 bpd set in the original state budget, is still considered to be unrealistic and difficult to achieve considering the current sharp drop in oil price.

Bisnis Indonesia quoted Deputy for Operational Control at upstream oil and gas authority SKK Migas, Muliawan as saying that the new oil lifting target was based on oil price assumption of $100 per barrel, while the fact is that oil price has now dropped to the $40 level.

He added that several oil and gas contractors operating in the country have indicated to cut down production this year to avoid losses particularly those operating fields with production cost of more than $40 per barrel. There are also a number of lingering obstacles that have hampered oil and production in the country.

The Directorate General of Oil and Gas said in press statement that the government during a hearing with the House of Representatives Commission VII on energy and mining Tuesday proposed the lower oil lifting target in the revised 2015 state budget. Natural gas lifting target has also been lowered to 1,177,000 boepd from 2,148,000 boepd.

The directorate said that the 2015 oil lifting is expected to come primarily from oil fields operated by PT Chevron Pacific Indonesia (280,000), PT Pertamina EP (128,390 bp), Mobil Cepu (99,642 bpd), Total E&P Indonesie (62,679 bpd), and PHE ONWJ (41,300 bpd).

Meanwhile, natural gas lifting is expected to be sourced from field operated by Total E&P Indonesie (246,00 boepd), BP Tanggung (180,000 boepd), ConocoPhillips Grissik (165,00 boepd), Pertamina EP (152,00 boepd), and ConocoPhillips Natuna (59,000 boepd).

Editing by Reiner Simanjuntak