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Enhanced oil recovery may be mandatory for new contracts
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Pertamina Hulu Energi West Madura Offshore (PHE WMO) workers are moved in a personnel basket from a ship to the company’s oil rig off the coast of Madura Island in East Java. (JP/Wahyoe Boediwardhana)
T
he Energy and Mineral Resources Ministry is currently preparing a ministerial decree that may compel new contracts for existing fields to include proposals for enhanced oil recovery (EOR) activities to slow down the country's declining production rate.
The ministry is still evaluating the possible incentives it can offer to contractors to increase their enthusiasm for EOR activities, said oil and gas director general IGN Wiratmaja Puja on Wednesday, adding that an increase in the profit split for contractors was one possible incentive.
"We want it so that when [contractors] submit their proposals, they already have plans for future EOR activities in the field," he said.
(Read also: Gross-split scheme may hinder enhanced oil recovery)
Indonesia's ready-to-sell oil production, locally known as lifting, has declined drastically since its heyday in the 1970s because of aging wells and a lack of new discoveries. This year, the government has set a lifting target of 815,000 barrels of oil per day (bopd).
Official data predicts that if no new discoveries are made, lifting could drop to below 400,000 bopd within the next decade.
However, Wiratmaja said that implementing EOR activities in just 34 priority fields could help boost lifting to about 600,000 bopd by 2030. (bbn)
