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Oil firms look to take advantage of surging prices
Some energy companies are hunting for undiscovered oil and gas to seize the opportunity of surging prices, but experts say soaring costs — driven ironically by high energy prices — pose a challenge to boosting exploration.
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Pertamina Hulu Energi Offshore North West Java (PHE ONWJ) general manager Siswantoro M. Prasodjo (second left) hands over a symbolic agreement document to Upstream Oil and Gas Special Regulatory Taskforce (SKKMigas) head of project management and facility maintenance Luky Agung Yusgiantoro (second right) during the launch of a rig platform owned by PHE ONWJ, a subsidiary of state-owned energy company Pertamina, in Kutai Kartanegara, East Kalimantan, in March 2019. (Antara/Risky Andrianto)
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n official at the Upstream Oil and Gas Special Regulatory Taskforce (SKK Migas) has revealed that some energy companies were hunting for undiscovered oil and gas to seize the opportunity of surging prices, but experts say soaring costs — driven ironically by high energy prices — pose a challenge to boosting exploration.
Julius Wiratno, operations deputy of SKK Migas, said the task force was still implementing programs previously agreed on for this year. However, he noted that several oil and gas contractors had proposed additional work, including development drilling and workover or well services, to take advantage of rising oil prices.
“There are several contractors, for example Pertamina Hulu Energi. However, there are also those who [prefer to] wait and see, with various considerations [in mind],” he told The Jakarta Post on Monday without elaborating.
State-owned energy company Pertamina did not immediately respond to a request for comment.
“Rising prices will raise incentives to explore, but rising crude oil and gas prices will also have an [adverse] impact on the recovery of these companies. It looks like, in general, the recovery process is not happening soon enough for companies to [push for more] exploration,” Putra Adhiguna, an energy analyst with the Institute for Energy Economics and Financial Analysis (IEEFA), told the Post on Monday.
Concurring with Putra, Moshe Rizal, executive director of the Oil and Gas Companies Association (Aspermigas), said rising oil prices could push up costs for firms as they needed to use energy for their own operations, making it harder for them to increase exploration activities.
Read also: Domestic oil output 15% short of target in Q1
