Govt targets oil production to rebound to 1m bopd in 2013

The government targets oil production to reach 1 million barrels of oil per day (BOPD) starting in 2013, from around 950,000 BOPD at present.

?That is one of the 2025 targets, but it could be reached beginning from 2013,? said Eddy Hermantoro, Director for Upstream at the Directorate for Oil and Gas of the Energy and Mineral Resources Ministry.

He said a number of steps is undertaken to achieve the target, such as increasing exploration activities to raise proven reserves, optimizing production from existing fields through enhance oil recovery (EOR) technology as well as offering more working areas to investors.

Eddy also said there has been paradigm shift in oil and gas industry. The industry is no longer encouraged to increase government revenues, instead it is encouraged to increase the industry?s multiplier effect on the economy. ?Profits from oil and gas are reinvested by companies engaging in the industry, which ultimately increase their income. The higher their revenues, the higher the government income from taxes,? he said.

In addition, there has been a shift of exploration and exploitation activities at eastern Indonesia, which are now mostly in deep sea waters. ?As the new fields are located in deep sea and frontier areas, investment will be higher and technology used to develop the blocks will be more advanced,? said Rudi Rubiantoro, Deputy Head of BPMigas for Upstream Sector.

There has also been a a shift in exploration to exploring more gas than oil, which has been happening since 2003. Eddy also said the government aims to increase involvement of domestic companies in upstream sector to 50 percent and the utilization of domestic goods and services to as high as 91 percent. Currently, the oil and gas industry is dominated by foreign players, while most goods and services being used are imported. (sonar)