The upstream oil and gas industry of Indonesia invested 10.21 billion US dollars and performed well in 2020 according to SKK Migas, the special task force in charge of upstream oil and gas activities of oil companies in Indonesia.
The oil and gas industry of Indonesia successfully met and even exceeded some of the 2020 targets that were set by the Indonesian government in the following key areas:
- Reserve Replacement ratio (RRR).
- Oil lifting
- Controlling the cost recovery
- Revenue intake by the government
- Completion of oil and gas projects
RESERVE REPLACEMENT RATIO
The reserve replacement ratio in 2020 is 101.6%. The oil industry added 705 MMBOE of reserve in 2020.
The average daily oil lifting in 2020 is 706,000 BOPD. This exceeded the government target of 705,000 BOPD.
However, daily gas production in 2020 is 5461 MMSCFD. This is below the government target of 5556 MMSCFD.
The amount of cost recovery in 2020 is US$ 8.12 billion which is in line with the government expectations.
OIL REVENUE TO GOVERNMENT
The oil industry contributed US$ 8.4 billion of revenues to the Indonesian government. This amount is 41% higher than the expected amount of US$5.86 billion.
COMPLETION OF OIL AND GAS PROJECTS
Fifteen oil and gas projects went on stream in 2020. These new projects added 9182 barrels of oil per day and 111 million SCF of gas per day.
SKK Migas was active and running in 2020 to keep the oil and gas exploration and production activities at a high level. Here are some of the key actions that SKK Migas undertook in 2020:
- SKK Migas signed twenty-four PSC side letters and sixty-one letters of agreement (LoA).
- The government reduced the prices of gas sold to domestic companies to stimulate economic growth.
- Allowing oil and gas operators to delay topping up the Abandonment and Site Restoration fund.
- Eliminating the costs to oil operators of using government assets in their exploration and production activities.
- Allowing oil companies to accelerate asset appreciation.
- SKK Migas and Chevron Pacific Indonesia signed the Heads of Agreement to ensure the continuity of a high level of activities such as well drilling and production optimization in the Rokan Block during the final phase of the PSC contract. Chevron will hand over the operatorship of The Rokan block to Pertamina when its production sharing contract expires in August 2021.
- SKK Migas approved the Plan of Development (POD) submitted by Repsol for the development of the huge Kaliberau gas field having 445 billion SCF of gas reserve in the Sakakemang block. The total investment in this project is estimated at 359 million US dollars.
EXPLORATION AND PRODUCTION TARGETS FOR 2021
Being optimistic that Indonesia will meet the target of 1 million BOPD and 12 BSCFD of gas by 2030, SKK Migas is committed to keeping oil and gas production high in 2021. Here are its targets for oil and gas activities in 2021:
- Daily oil production – 705,000 BOPD. This is the same target as in 2020.
- The number of exploration wells – 43. This is a significant increase from the actual number of exploration wells drilled in 2020.
- The number of development wells – 616. This target is much higher than the actual number of development wells drilled in 2020.
- Number of workovers – 615
- Number of well services – 26,431
- 2-D seismic survey – 3569 Km
- 3-D seismic survey – 1549 Km2
The Indonesian oil industry performed well in 2020. Mr. Dwi Soetjipto, the head of SKK Migas said: “The year 2020 was a difficult year for many oil operators due to the Covid 19 pandemic and the low oil prices. Nevertheless, the oil industry of Indonesia was able to meet several targets set by the government. Hopefully, this will help the country’s economy.”
This blog article is adapted from “Kinerja Hulu Migas Gemilang Sepanjang 2020” published by SKK Migas on 4 January 2021.