The oil and gas industry of Indonesia has been active and alive in the first nine months of 2022, and it expects to up the tempo of its exploration and production activities as it marches toward the year-end.
Here is the summary of oil and gas activities in Indonesia at the end of the third quarter of 2022 according to a report published by SKK Migas.
DEVELOPMENT WELL DRILLING
Oil and gas operators in Indonesia drilled 545 development wells in the first three quarters of 2022.
The head of SKK Migas, Mr. Dwi Soetjipto, said that the number of development wells drilled by the end of the third quarter of 2022 has exceeded the number of wells drilled in 2021.
To meet the daily oil and gas production targets, it has increased the target of the number of development wells in 2022 from 790 to 801.
Oil and gas operators drilled 21 exploration wells in the first three quarters. This is the same number of exploration wells drilled in the same period in 2021.
Oil operators carried out 495 workovers in the first three quarters. This number is 87% of the 2022 workover target.
At the same time, well service operations also took place at a high tempo. Companies carried out more than 22000 well service operations. This number represents 99% of the 2022 target.
OIL AND GAS PRODUCTION
Here is the daily oil and gas production at the end of September 2022.
Oil – 613,000 BOPD
Gas – 5,353,000 MMSCFD
The combined daily oil and gas production is 1,562,000 BOEPD. This number is around 90% of the 2022 target.
As most of the oil and gas fields are very old, while operators are drilling wells to increase production, they also are experiencing high rates of natural decline.
STATE REVENUES FROM OIL AND GAS
The oil industry contributed USD 13.95 billion or IDR 202 trillion to the coffers of the government of Indonesia in the first nine months of 2022.
In just 9 months, this amount has exceeded the entire 2022 target of the state revenues from oil and gas by 40% due to the high prices of oil.
The oil and gas reserve replacement ratio (RRR) reaches 97.5% of the 2022 target.
SKK Migas expects the RRR will reach 186% of the 2022 target by the end of this year as several plan of development (POD) will be approved.
The RRR realized in the past five years has been greater than 100% of the target.
MULTIPLIER EFFECTS OF OIL AND GAS OPERATIONS
The oil and gas industry activities create positive and significant multiplier effects to the economy of Indonesia besides generating substantial revenues to the government.
The value of the components produced domestically in oil equipment and services sold amounts to USD 2.9 billion or IDR 42 trillion.
TKDN (Tingkat Komponen Dalam Negeri), the percentage of domestic components or services in products, reaches nearly 64%.
SKK Migas is actively encouraging and promoting national entrepreneurs and equipment manufacturers to meet the needs of the oil and gas industry.
ONE-DOOR SERVICE POLICY
The One Door Service Policy (ODSP) of SKK Migas has been very instrumental in getting permits and licenses approved quickly.
The average licensing process period has been sharply reduced to about 1 day from 14 days before the ODSP policy was introduced.
SKK Migas is committed to making it easy for oil operators to carry out their exploration and production activities as it continues to encourage massive and aggressive efforts by oil operators to increase their oil and gas production.
This article is adapted by Jamin Djuang from a recent article published by SKK Migas – The Special Task Force for Upstream Oil and Gas Business Activities of Indonesia.