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xploration for new oil and gas sources appears slow despite the government’s strong commitment to boost production.

The Production Improvement Controlling Team (TP3M) reported on Wednesday that oil and gas contractors drilled only 58 exploration wells in the first seven months of 2011, about 33 percent of a planned total 176 wells.

TP3M chairman Deni Tampubulon said that oil and gas companies in Indonesia had great difficulties in executing drilling plans, mostly due to problems obtaining permits and in land acquisition.

“The problems are classic. Besides permission and land acquisition [problems], several companies also have had problems in procuring drilling equipment,” he told reporters at a press conference at the Energy and Mineral Resources Ministry in Jakarta.

While the government had reached its target to drill 490 development (productive) wells, several contractors had failed to meet their targets.

However, many other companies have exceeded their targets, he added.

“To increase the drilling of development and exploration wells, the team recommends that the government accelerate the permission granting process, improve strategies to procure equipment, improve its understanding of the characteristics and performance of reservoirs, improve the availability and quality of subsurface data and strengthen supervision of contractors,” Deni said.

Energy and Mineral Resources Ministry’s spokesperson Kardaya Warnika said at the press conference that most companies that failed to meet their drilling targets lacked strong financial support.

As reported earlier, BPMigas head Raden Priyono announced that the agency would revoke the licenses of companies conducting exploration at eight oil and gas working areas due to their failure to achieve progress as expected.

The team reported that Indonesia’s oil production in August reached a high of 913,000 barrels per day (bpd) this year. Average production level from January to Aug. 22 was 905,000 bpd, well below the government’s target of 945,000 bpd.

Natural gas production in August topped 9,068 million standard cubic feet per day (mmscfd), while average production from January to Aug. 22 was 8,418 mmscfd.

To increase production, the team recommended that the government solve problems related to permits and land acquisition, facilitate the procurement of additional rigs, equipment and production facilities, overcome problems in oil transportation, and accelerate the implementation of enhanced oil recovery (EOR) technologies.

Despite the current low level of oil production, Kardaya claimed that the government’s could reach its target of 945,000 bpd.

He called the target “reasonable”, despite the skepticism of several experts.