Government sees lower oil and gas revenue, investment

SKK Migas

The government expected lower revenue from the upstream oil and gas sector this year due to the weak oil price environment. Realized investment in the sector this year is also expected to be lower.

Head of upstream oil and gas authority SKK Migas, Amien Sunaryadi said on Monday that gross revenue from the oil and gas sector this year is estimated at US$23.98 billion, while cost recovery is estimated at $11.47 billion, thus resulting in a net revenue of $12.5 billion, of which $3.22 billion goes to oil and gas contractors and $9.29 billion to the government.

?It (the revenue) is lower than last year?s,? Amien said during a hearing with the House of Representatives Commission VII on energy and mining, but did not provide comparative figure.

Meanwhile, realized investment in the upstream oil and gas sector this year is expected to reach $10.43 billion, comprising of $10.3 billion for exploitation activities, and $0.09 billion for production activities, he said. Realized investment in the upstream sector last year totaled $12.05 billion.

Elsewhere, Amien said that oil and gas production as per November 30 stood at 831,500 bpd and 7,145 mmscfd, slightly higher than target.

Regarding investment target for next year has yet to be determined, pending the completion of the 2017 work plan and budget (WP&B), he said, adding that the WP&B is expected to be finalized this week.

Meanwhile, SKK Migas this year has approved 27 plan of development and plan of future development which could lift reserves by 204 million boe, with projected investment of up to $2.85 billion.

The regulatory body also noted that there are 10 new oil and gas production facilities that can be completed this year including Train-B Blok Cepu (ExxonMobil Cepu Limited), onshore receiving facility (ORF) of Bukit Tua Field (Petronas Carigali Ketapang 2 Limited), Donggi and Pondok Makmur (PT Pertamina EP), Dayung Compression-2 (ConocoPhilips Grissik Ltd.), IDD Bangka (Chevron Indonesia Company), North Duri Block?s Development Area 13 (PT Chevron Pacific Indonesia), Karendan (Ophir Energy), KRA South (Star Energy Kakap Ltd.), and Ario Damar-Sriwijaya Phase-1 (Tropik Pandan Energy).

Realized drilling program of exploration wells reached only 43 units of the target 67 units, while realized drilling of development wells reached only 223 wells of the target 245 wells.

Regarding 2017 lifting target of 815,000 bpd of oil and 6,440 mmscfd of gas, SKK Migas said it will be mainly contributed by 10 largest oil and gas contractors including Chevron Pacific Indonesia (Blok Rokan) 228,908 bpd, ExxonMobil Cepu Limited (Blok Cepu) 200,000 bpd, PT Pertamina EP (scattered across Indonesia) 84,214 bpd, Total E&P Indonesie (Blok Mahakam) 52,852 bph, PT Pertamina Hulu Energi Offshore North West Java Limited (Blok ONWJ) 36,500 bpd, CNOOC SES Limited (Blok South East Sumatera) 31,398 bpd, Chevron Indonesia Company (Blok East Kalimantan) 17,700 bpd, ConocoPhilips (Blok B South Natuna) 17,400 bpd, Petronas Canigali Ketapang Limited (Blok Ketapang) 15,631 bpd and PetroChina International Jabung Limited (Blok Jabung) 14,400 bpd.

Editing by Reiner Simanjuntak