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Indonesia to accelerate oil and gas exploration amid high prices
The upstream oil and gas regulatory body has expanded the country's exploration and targets for this year to banking on higher firms' revenue driven by last year’s price surge for crude.
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Chevron Indonesia operates on April 23, 2019 an offshore platform at the Sepinggan field in the Makassar Strait, 37 kilometers east of Balikpapan, East Kalimantan. The government has increased its 2023 targets for oil and gas production and exploration, which looks to remain a strategic development mainstay despite its net-zero agenda. (JP/Novi Adri)
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he government is targeting a massive increase in oil and gas exploration this year to boost the country’s production and supply, banking on the much improved financial positions of the sector’s firms, driven by last year’s surge in crude oil prices.
The estimated target for exploratory drilling has been increased to 57 wells, almost double the 30 exploratory wells drilled last year and marking steady expansion over the past five years, according to data from the Upstream Oil and Gas Regulatory Task Force (SKK Migas).
Meanwhile, exploratory investment is projected to rise to US$1.7 billion in 2023, more than double the $800 million in realized investments last year.
Moshe Rizal, who heads the investment committee of the Association of Oil and Gas Companies (Aspermigas), said last year’s high crude prices, among other factors, had prompted oil and gas firms to expand exploration this year.
The 2022 spot prices for international benchmark Brent crude and North American benchmark West Texas Intermediate (WTI) respectively averaged $100 and $95 per barrel, data from the US Energy Information Administration (EIA) show.
According to SKK Migas data, Indonesia’s oil and gas industry raked in gross revenue of $39.1 billion in 2022, a more than 31 percent increase from 2021.
“The oil and gas exploration trend is expected to increase worldwide. But Indonesia needs to remember [that] we are competing with other countries that are also looking for investors, so the competition will get tougher,” Moshe told The Jakarta Post on Tuesday.
