Govt proposes 950,000 barrels/day oil lifting for 2012

The Energy and Mineral Resources Ministry proposes oil lifting assumption for 2012 State Budget at 950,000 barrels per day, slightly higher than oil lifting in the 2011 revised State Budget of 945,000 barrels per day, said Evita Legowo, Director General for Oil and Gas of the Energy Ministry during a hearing with Commission VII of the House of Representative (DPR).

?Based on the progress of production in 2011, efforts to raise production as well as estimated production increase in 2012, oil lifting assumption in 2012 State Budget is therefore proposed at 950,000 barrels per day,? Evita said.

Deputy chairman of the upstream oil and gas regulator BPMigas Hardiono said that in order to ramp up the oil lifting, the agency will undertake steps to slow down the natural decline rate of oil production from 12 percent to 3 percent, by optimizing the production in the existing fields. Other steps include speeding up the development of new fields and applying enhanced oil recovery (EOR) technology.

Evita said there are a number of obstacles that hamper the efforts to jack up oil production in Indonesia, including the different perception on the cost recovery. ?For oil and gas industry players, cost recovery is considered as an investment, while others consider it as expenses,? said Evita.

Most of existing oil and gas fields are matured, therefore the costs to operate these fields keep increasing. The other obstacles are difficulties in clearing lands, overlapping claims of land, slow progress in securing land permit from local governments and so on, she explained (roffie/romel)