SKK Migas: Realized oil, gas investment far below target

By Godang Sitompul

Petromindo|Lucky

Realized investment in the country?s upstream oil and gas sector as per early October of this year remained far below the full-year target, according to upstream oil and gas authority SKK Migas.

SKK Migas Chief Amien Sunaryadi said on Friday that based on the performance so far, the full-year investment target is unlikely to be achieved.

He said that as per October 2, realized investment in the upstream sector stood at only US$5.57 billion compared to the 2017 target of $12.85 billion.

Amien explained that the lower investment realization was mainly attributed to financial difficulties suffered by many oil and gas contractors, prompting them to delay drilling programs. He said that the investment target was made based on the contractors 2017 work program and budget (WP&B), which has taken into account the current weak oil price environment. ?This is because many (upstream) companies suffer financial difficulties,? he said.

He said that investment in exploitation activities have been low due primarily to delay in tender by the oil and gas contractors. He cited as an example of a delay in tender for procurement of vessel to be deployed at MBH Madura field into next year. As such, the investment will not be realized this year.

Given such conditions, Amien is pessimistic that the 2017 investment target in the upstream sector could be realized.

He said that realized investment in the downstream sector is also still far below the full-year target of $2.42 billion. As per early October, realized investment stood at only $835.52 million.

Elsewhere, Amien said that oil lifting as per September 30 reached 797,000 barrel per day, or 98 percent of the 815,000 bpd target set in the revised 2017 state budget

Meanwhile, gas lifting was higher reaching 6,367 mmscfd, or 99 percent of the 6,440 mmscfd target.

State revenue from the oil and gas sector as per September 30 reached $9.59 billion, or 79 percent of the $12.2 billion target set in the state budget, Amien said.

In the first nine months of this year, cost recovery expenditure totaled $7.76 billion, or 73 percent of the $10.71 billion target set in the state budget.

Editing by Reiner Simanjuntak