Investment in upstream sector drops 15%

By Bernard Loebs

Oil and gas contractors have revised down their investment plan for this year by 15 percent to US$19 billion from $22 billion in the initial Work Program & Budget (WP&B), a senior official of upstream authority SKK Migas said on Friday.

Under the revised WP&B, the country?s oil and gas contractors revised down their oil production to 828,000 bopd, a 2.5 percent decrease from the original plan of 850,000 bopd, and gas production to 6,400 mmscfd, a 3 percent decrease from the original plan of 6,600 mmscfd.

Cost recovery has been revised down to $16 billion from $20 billion.

WP&B is usually composed around November each year. The original 2015 WP&B was thus composed around November of last year. Following the sharp drop in oil prices, SKK Migas has allowed all oil and gas contractors to revise their WP&B.

Bennny noted as the contractors? expenditures are falling by 15 percent, it does not necessarily mean the production is also falling by 15 percent. SKK Migas will do its best to prevent a significant decrease in production.

Of all the contractors, PT Pertamina proposed the steepest cut in production in its revised WP&B, from 128,000 bopd to 110,000 bopd, a 18,000 bopd production cut.

Editing by Johannes Simbolon