Oil self-sufficiency by 2010: Govt

Abdul Khalik ,  The Jakarta Post ,  Balikpapan   |  Thu, 05/08/2008 11:03 AM  |  Business

The government plans to increase the country's oil production to between 1.2 and 1.5 million barrels per day (bpd) by 2010 from about 920,000 bpd currently in an effort to achieve self-sufficiency amid global price hikes.

Vice President Jusuf Kalla told officials of state oil company Pertamina during an inspection on the company's refinery processing unit here Wednesday to increase production levels to help lift subsidy burdens and to refrain from having to import oil.

Indonesia has been a net importer of oil over the last five years due to low production levels and a lack of new investment in the oil sector. Pressured by global oil prices already hovering at more than US$120 per barrel, the government has decided to raise oil prices.

Kalla said to allow the country to increase production it must forge efficiency and increase output at the production unit level, particularly at all six of Pertamina's production units in Balikpapan, East Kalimantan, Riau, South Sumatera, Balongan in West Java, Cilacap in Central Java and Papua.

"I am sure we can be self-sufficient by 2010 if we can start new plants in Cepu and Natuna to produce oil immediately. This is the only way we can satisfy domestic needs safely, while avoiding imports to get out of skyrocketing oil prices," he said.

Pertamina's processing unit director Rukmi Hadi Hartini said by upgrading its plants and machineries, Balikpapan's unit could increase production from the current 260,000 bpd to around 300,000 bpd by next year.

"By cutting costs, we can, for instance, save some $87 million a year, and use it for enhancing plant capacity," she said.

Kalla told the officials it was time to forget prioritizing production share from foreign partners and letting self-sufficiency slide.

"Previously, we could just ask for a share form our partner, and then sit back to wait for the profits. With such a high oil price, and our low production capability, we can't do that anymore," he said.

Deputy director of Pertamina Iin Arifin Tahian said production would be enhanced in other units across the country to achieve the target.

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