PSCs in Sumatra continue to face various obstacles

By Godang Sitompul

Oil and gas production sharing contractors (PSCs) operating in the southern part of Sumatra continue to face a number of problems such as land acquisition, land conflicts, licensing, and the stealing of crude output.

This is despite the fact that the region accounts for about 20 percent of national oil and gas production.

?Stealing, land acquisition and overlapping (of concession), and licensing obstacles remain a problem. Nevertheless, the highest oil production is at Medco Rimau at 18,000 bpd, while gas from COPHIi?s Suban Block stands at 1.3 bcf (1,300 mmscfd) ,? said Setia Budi, Head of the southern part of Sumatra office of upstream authority SKK Migas, to Petromindo.com Friday.

He said that SKK Migas will talk with the PSCs to help resolve the various problems which have hampered oil and gas production activities in the region.

Elsewhere, Setia said that Total EP Indonesia plans to conduct survey activity at the Mentawai Block, in Bengkulu, mid this year. He added that the company has begun campaign for the survey and drilling activities, and has requested for the help of the Indonesian Navy for security.

Setia said that SKK Migas appreciated Total E&P Indonesia?s move to carry out exploration work in the deep sea and zone prone to earthquake in Bengkulu.

Meanwhile, the Ministry of Energy and Mineral Resources called on the PSCs to remain committed to their respective contracts, and that if they encounter problems such as land conflicts, the PSCs are expected to coordinate with the ministry.

Director general of oil and gas at the ministry, A. Edy Hermantoro said that the ministry will assign one of its staff experts to help resolve the problems, coordinating with other government offices to ensure that they be resoved quickly.

He added that the government will not renew exploration period of PSCs which have failed to live up to their commitments as stated in the contract.

Editing by Reiner Simanjuntak