Govt proposes oil production target revision

Given the continuously decreasing national oil production, the government proposed to the House of Representative (DPR) the revision of the 2011 oil production target from 970,000 barrels per day (bpd) to between 945,000 bpd and 952,000 bpd.

The government also proposed the crude oil price assumption in the State Budget to be changed from US$80 a barrel to $100 a barrel to adjust to the global oil price rally.

Finance Minister Agus Martowardojo told a hearing with the House on Tuesday that oil production naturally decreases by 12 percent every year, but other factors like cabotage rule implementation, delayed production at Cepu block, weather problem and technical issues have affected national production significantly. As of February 2011, the production only reached 905,000 bpd.

Energy and Mineral Resources Minister Darwin Zahedy Saleh said global oil production showed decreasing trend every year. In a bid to boost the production, he said, the government would start production in new fields and accelerate put on production (POP) in certain fields.

Darwin said 11 contractors would hold the POP, including Kodeco, Kangean Energy, Pertamina-Talisman JM JOB, Medco Rimau, Total E&P and Chevron Pacific Indonesia. The effort is expected to provide additional production of 38,800 bpd. (godang/giok)