SKK Migas says upstream activities less than encouraging

The realization of seismic surveys and drilling activities by oil and gas contractors as of May 31, 2014 was less than encouraging, according to upstream authority SKK Migas.

In the first five months of the year, 2D seismic survey were carried over a total length of 2,668 km, compared to the yearly target of 9,020 km set in the Work Program and Budget (WP&B). Meanwhile, 3D seismic survey were carried on a total area of 4,348 sq km during the same period, compared to the yearly WP&B target of 11,932 sq km, SKK Migas? Operation Control Deputy Muliawan said in a statement obtained on Friday.

Meanwhile, during the five-month period, a total of 31 exploration wells and 537 development wells were drilled. The drilling target for the year is 206 exploration wells (oil, gas and CBM), and 1,300 for development wells. A total of 324 workover activities were carried out during the period, compared to the annual target of 989 activities. Well maintenance activities were performed on 12,368 wells during the five month period, compared to the annual target of 33,170 activities.

?The results were indeed less than encouraging. Still in view of the obstacles confronting the oil and gas upstream sector, SKK Migas and PSCs have done their best (to meet the target),? Muliawan.

He said the obstacles faced by the PSC in their activities are mostly ?external? in nature. The external obstacles include oil and gas concessions overlapping with plantation lands, industrial forestry, conservation areas; difficulties in obtaining licenses from various governmental institutions; protests from the local community and their demand for corporate social responsibility programs; and the lack of drilling rig available on the market.

Supports from various government institutions are necessary to solve such problems, he said.

There are also internal obstacles, such as the lack of funding on the part of the contractors as well as technical problems experienced during the activities, he said, adding that all the obstacles will become the subject of discussion during the incoming meeting between SKK Migas, related agencies and 400 PSC holders to discuss the first semester realization of seismic survey, drilling, workover and well maintenance.

Editing by Johannes Simbolon