Eleven oil and gas projects set to go on stream in Indonesia

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Pertamina Hulu Energi West Madura Offshore (PHE WMO) workers are moved in a personnel basket from a ship to the company’s oil rig off the coast of Madura Island in Indonesia’s East Java. WAHYOE BOEDIWARDHANA/THE JAKARTA POST

Indonesia's Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) said it expects as many as 11 oil and gas exploration projects to go on stream in the country’s waters this year and further increase national oil and gas production.

Three of the oil and gas projects went on stream by last month and another eight projects are expected to begin production in the fourth quarter of this year, the oil and gas task force said.

 

The eight projects comprise five gas projects and three oil projects that are expected to produce, respectively, 43.66 million square cubic metres per day (mmscfd) and 10,500 barrels of oil per day (bopd), SKKMigas spokesman Wisnu Prabawa Taher has said.

Domestic and foreign investors have spent a total of $800 million for the eight projects, which account for 11 per cent of the total investment of $7.3 billion in the upstream oil and gas sectors as of August this year.

“In principle, our activities will go on. How much will we invest [next year]? We will wait until the third quarter is over. Many projects only finish in the fourth quarter,” Wisno said in Jakarta on September 29.

The projects include, among others, ExxonMobil’s exploration of the offshore Kedung Keris oil field in East Java and ConocoPhillips’s exploration of the Suban gas field in South Sumatra.

ExxonMobil’s project, which Wisnu said is 85 per cent complete, holds the largest estimated oil production capacity among the eight projects – 3,800bopd.

“The oil is expected to start flowing by the end of 2019. This oil will be channelled through a 16km pipe to the Banyu Urip facility for processing before being channelled to a floating storage and offloading facility,” ExxonMobil Indonesia public and government affairs vice-president Azi Alam told the Jakarta Post.

 

The second and third largest oil projects are respectively those of Malaysia’s Petronas and of Petro China. The former company estimates it could produce 3,182bopd from the offshore Bukit Tua field near East Java while the latter 2,000bopd from the Panen field in South Sulawesi.

Meanwhile, the ConocoPhillips project, which Wisnu said was 99 per cent complete, promises the largest estimated gas production at 100mmscfd.

The second and third largest gas projects are respectively those of Britain’s Premier Oil and Indonesia’s Medco E&P. Premier estimates it could produce 80mmscfd from the Bison, Iguana, Gajah Puteri field in the North Natuna Sea, while Medco plans to produce 45mmscfd from the Buntal field at the same sea.

According to the latest SKKMigas data, Indonesia’s overall oil production reached 754,000bopd and gas production reached 1.29 million barrels of oil equivalent per day (boepd) in August.

Oil production is slightly below this year’s target of 755,000bopd but gas production is slightly higher than the targeted 1.25 million boepd, both of which were stipulated in the state budget.

For the government, increasing oil and gas production is necessary to cover Indonesia’s trade deficit, which was $1.81 billion in the January to August period, partly caused by oil imports, according to Statistics Indonesia. The deficit is lower than the $4.16 billion deficit booked in the same period last year.

“There are also about 40 oil and gas projects in progress that are scheduled for operation between 2019 and 2027. They are dynamic. So there may be changes in on-stream dates,” said Wisnu.

THE JAKARTA POST