PHE targets to increase output by 14% this year

PT Pertamina Hulu Energi (PHE), an upstream unit of state owned oil and gas firm PT Pertamina (Persero), has targeted to increase its oil and gas output to 141,000 barrels of oil equivalent per day, or up by 14 percent compared to last year's output.

The firm has prepared seven strategic initiatives to reach the target, PHE's president director Dwi Martono said on Monday.

"God wiling, the target will be achieved. The seven strategic initiatives have been made as part of the grand strategy to optimize the production of the existing assets and increase (the value of) the assets through exploration activities," Dwi said.

The seven strategic initiatives are, first, enhancing supervision of investment projects in 2011 by implementing project and risk management; second, improving operational cost efficiency through cost structure analysis; third, actively giving supports to its JOB and BOB joint operational units in achieving production target through service level agreement/time sharing agreement; fourth, enhancing health, safety and environment qualities; fifth, assesing and implementing divestment; sixth, taking over the operation of the West Madura Offshore block; seventh, the develoment of alternative energies, such as CBM and coal shales.

Dwi said the firm is expected to increase average oil production by 24 percent to 66,000 barrels per day (bpd) this year, from 54,000 bpd last year. Meanwhile, gas output is expected to increase to 430 million standard cubic feet per day (mmscfd) this year, up from 403 mmscfd last year.

To reach the higher production target, PHE will raise its investment by 63 percent to Rp 6.1 trillion this year, from Rp 3.7 trillion (US$last year. The funds will be spent for exploration drillings and development drillings at South Sembakung, Senoro-Toili, APNF fields, and the development of Donggi-Senoro LNG facilities.

PHE expects its oil reserves to increase by 23 million barrels and its gas reserves by 40 billion standard cubic feet (bscf) thanks to the exploration activities. Meanwhile, oil production is expected to increase by 13,683 bpd, while gas production by 54 mmscfd this year.

"With such increases, our net profit is expected to reach Rp 4.6 trillion this year, up by 22 percent compared to last year's," Dwi said.

Last year, the firm produced 123,617 bpd of oil, up 17.5 percent from the previous year's output, while its gas output was higher 48 percent than the target.

The firm has not only paid attention at production, but also health, safety and environmental affairs. This year, the firm will implement the so-called Contractor Safety Management System aimed at achieving zero accident this year. (Bernard)