Chevron oil production drops by 32,000 bpd

The oil production of PT Chevron Pacific Indonesia (CPI) has dropped by 32,000 barrels per day (bpd) since Wednesday due disruption of gas supply used for the oil company’s enhanced oil recovery operation, oil and gas upstream regulator BPMigas reported on Thursday.

“We got report that the production has declined by 32,000 bpd due to the gas supply disruption,” BPMigas’s spokesman Elan Biantoro said in Jakarta Thursday .

CPI, the local subsidiary of US energy giant Chevron Corporation, which contributes nearly a half of Indonesia’s oil production, received around 375 billion British thermal units of gas per day (BBTUD) from ConocoPhillips’ Grissik field in Riau. CPI injects the gas into the Duri field to enhance oil recovery.

But, since Wednesday, the gas supply was stopped due to a leak in a gas pipeline which is operated by domestic gas transporter PT Transportasi Gas Indonesia (TGI). Initially, the gas from ConocoPhillips was exchanged with 50,000 bpd of crude oil from CPI under a swap agreement between the two companies.

However, the agreement drew strong criticisms from lawmakers because the swapped oil was consequently not included in the country’s oil and gas production figures. Starting from Aug. 1 this year, the deal was replaced with a normal gas sales agreement.

CPI currently operates three oil fields: Dumai, Duri, Minas—all of which are located in Riau province, under a production sharing contract. Elan said the Duri block produced as much as 180,000 bpd of oil in normal circumstances.

BPMigas said TGI might need about five days to repair the damage to the pipeline.

“But, the supply cannot immediately reach its normal level as the facility needs several more days for normalization,” he said.

CPI confirmed that the incident was affecting oil production on Thursday.

“Intensive efforts have been carried out both internally and in coordination with other associated parties to reduce the impact of the fall in production due to the gas pipe leak,” CPI’s spokeswoman Santi Manuhutu said. However she refused to give details on the total amount of production lost due to this incident.

CPI estimated that the pipe repair would take between three to five days.

Elan said that the pipe leak also affected production of a joint venture Pertamina and Bumi Siak Pusako and the production of government’s company PT Sarana Pembangunan Riau. As of Thursday, the production of Pertamina-Bumi Siak Pusako declined by 3,700 bpod, while the production of PT Sarana Pembangunan dropped by 200 bpd.

Elen said that the production decline would be bigger as CPI had to shut down activities at 700 wells and Pertamina must close activities at 400 wells. “We estimate the total production decline could increase by up to 150,000 bpd,” he added,

The decline in CPI’s oil production would affect national oil production figures taking into account the significance of this level of production to the figures for total national output.

The government expects oil production to reach 965,000 bpd this year. CPI is expected to contribute as much as 370,000 bpd to the total production figures.

As of Aug. 26, the company has pumped out an average daily production of as much as 373,418 bpd. CPI is expected to maintain its production level at 370,000 bpd next year, despite these difficulties