Indonesia not able to meet new crude oil production quota

Indonesia is not able to meet a new additional crude oil production quota of 40,000 barrels per day (bpd) as it could not yet meet the previous additional quota of 41,600 bpd, according to the director general of oil and gas at the Ministry of Energy and Mineral Resources, Rachmat Sudibyo.

Rachmat said that with the new quota of 40,000 bpd, Indonesia got a total additional quota of 81,600 bpd, and it faced difficulties to meet that quota increase.

"Currently, Indonesia gets a new additional production quota of 40,000 bpd, besides our previous additional quota of 41,.600 bpd. It's still difficult for us to meet the quota that has come into affect since October.

"Until now, Indonesia is not able to meet its pervious additional quota of 41,600 bpd. Our total additional quota now stands at around 80,000 bpd. It's better for us to meet the previous additional quota first," Rachmat said.

He noted that Indonesia needed more time to meet the quota. The government was considering new incentives for oil contractors to revive their old or marginal wells that initially were economically not viable to operate.

"It's impossible for us to ask for a cut in our production quota. We just need to think of new incentives for production sharing contractors (PSCs) to revive their marginal wells."

Nevertheless, the director general noted that the new incentives must be drafted in a conceptual approach, and not drafted just because of the new quota. "Incentives must meet a number of classifications such as for frontier, remote areas or the age (content) of the oil reserves. The size of the incentives are still being discussed, and that's the portion of the finance minister to decide." (*)