Pertamina plans production target cut

State-owned oil and gas firm Pertamina plans to reduce its short-term oil production target amid the company?s low domestic production realization in recent months, The Jakarta Post reported on Friday.

The paper quoted Pertamina acting president director Muhamad Husen as saying the company?s domestic oil production was at around 200,000 barrels of oil per day (bopd), lower than the domestic production target of 220,000 bopd set for this year.

He said that with low realized production, it would be difficult for the company to reach next year?s target of 230,000 from domestic fields. ?If the initial target for this year is around 230,000 bopd, we will ask for a slight cut,? Husen added.

The company?s total oil output, both from domestic and international operations, reached 255,000 bopd at the end of September, increasing significantly by around 28 percent compared to 198,000 bopd in the same period last year.

Meanwhile, gas output touched 1,532 million standard cubic feet per day (mmscfd) at the end of the third quarter of the year, an increase of 1.2 percent compared to 1,513 mmscfd year on year.

The significant increase in oil output was particularly due to the contribution of the company?s international operations while domestic production was relatively stable, according to Husen.

Despite the significant increase, the company has fallen short of its full-year target. Pertamina is targeting to book total production of 280,200 bopd and 1,568 mmscfd by year end from both foreign and domestic fields.

The company?s total production target for next year is around this year?s figure.

Pertamina?s subsidiaries in the upstream sector are struggling to meet the full-year target. Production from PT Pertamina EP, the biggest contributor to Pertamina?s upstream business, remains around 120,000 bopd, below the full-year target of 128,000 bopd, The Post said.

Meanwhile, another big subsidiary, PT Pertamina Hulu Energy (PHE) only contributed 70,000 bopd as of the end of September, according to the firm?s president director, Ignatius Tenny Wibowo. PHE?s performance is also still below its full-year target of 73,000 bopd.

However, the company is likely to report a better gas output as its current production has exceeded a target of 490 mmscfd. ?We are now at 500 mmscfd,? Tenny said.

Pertamina is now expecting better results from its small fields to help the firm close the gap between this year?s oil output realization and the target.

?We?re trying to increase our output [in domestic fields] by around 5,000 bopd until the end of the year. Additional production is mostly from our operations in Kalimantan,? Husen said.

The country is targeting a total of 818,000 bopd this year. However, according to Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) acting chief Johanes Widjonarko, the current level was 800,000 bopd.

In the 2015 state budget, the government has set an ambitious target of 900,000 bopd, which could be too high even if the promising Banyu Urip field at Cepu block can reach peak production next year. (*)