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Govt to activate aging fields under new regulation
To optimize the country's crude oil production, the government will activate 5,000 aging fields under the newly issued 2008 Minister Regulation, says an official
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To optimize the country's crude oil production, the government will activate 5,000 aging fields under the newly issued 2008 Minister Regulation, says an official.
"There are more than 13,000 aging fields in the country, 5,000 of which could produce 5,000 to 12,000 barrels per day (bpd)," director general for oil and gas Luluk Sumiarso said Friday.
The regulation was issued to help the country meet its crude oil lifting target after years of failure. Increased production is hoped to leverage the country's oil export capacity amid soaring oil prices.
The government and the House of Representatives' budget committee agreed late last month to set the oil lifting target for this year at 927,000 barrel per day.
Out of 13, 824 fields only 745 are active, Luluk said. Most of the aging fields are located in the working area of state-owned oil and gas firm PT Pertamina's unit, PT Pertamina EP
According to the ministry, 3,623 aging fields are in Southern part of Sumatra, 2,392 in the Eastern part of Sumatra, 1,633 in the Central part of Sumatra, 3,143 in East Kalimantan, 100 in South Kalimantan, 2,496 in Central and East Java and Madura, 229 in Seram, and 208 in Papua.
The new regulation defines aging fields as crude oil fields drilled before 1970 and then left by contractors who had signed cooperating deals.
Bogo Sasono cooperative in Bojonegoro regency, Central Java, for example, is now operating an aging field in the working area of Pertamina EP. It produces up to 300 bpd and Pertamina gives Rp 960 per liter.
The Energy and Mineral Resources Ministry upstream director R.Priyono said that under the 2008 regulation cooperatives were not the only operators working on the aging fields.
"Most activities in the oil sector are still controlled by state-owned and private companies. The regulation will accommodate local cooperatives and local government-owned enterprises (BUMD) to work in the sector," he said.
In the 1996 Minister Decree on aging fields, the operators of aging fields were only cooperatives, Pertamina and oil and gas directorate.
The 2008 regulation says interested cooperatives and BUMD should cooperate with contractors under upstream oil and gas regulator BPMigas' approval.
Unlike the previous decree, Priyono said, the latest regulation would sanction cooperatives that did not give the oil production to the Pertamina.
"All oil production should be transferred to the contractors, otherwise they will get a criminal sentence," Priyono said.
The cooperatives or BUMD would receive payment according to the agreement, he said, which was effective for five years.
