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Govt sets higher upstream investment target for 2019
The government has set its investment target in the energy sector for this year at US$14
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span>The government has set its investment target in the energy sector for this year at US$14.79 billion, 5.64 percent higher than the target in 2018, explaining that three ongoing gas projects would help it achieve it.
The director general for the Energy and Mineral Resources Ministry’s oil and gas division, Djoko Siswanto, said the government was confident it could attain the 2019 target considering the readiness of at least three gas projects in the country.
The three projects are the Merakes gas field in the East Sepinggan Block, which is operated by Rome-based energy firm ENI S.p.A, the third liquefied natural gas (LNG) plant at the Tangguh Block in West Papua, which is operated by British Petroleum (BP), and the Jambaran-Tiung Biru (JTB) gas project in Bojonegoro regency, East Java.
The latter project is run by state energy holding company Pertamina and is predicted to cost $1.5 billion. It is to go onstream in 2021.
“We are optimist about reaching the target this year as ENI has set about $1.3 billion [for investment], while the Train 3 Tangguh [development] is still on track and also the JTB gas project,” Djoko said. “Those three projects will contribute highly to investment this year.”
It must be noted, however, that the amount of investments would not be spent wholly this year as the Train 3 Tangguh is an ongoing project that started in 2016 and is to begin operating in 2020 and the Merakes gas field, which cost $1.3 billion, is to be in development until 2021.
In the same event, Upstream Oil and Gas Regulatory Task Force (SKKMigas) chairman Dwi Soetjipto said ensuring investment in the upstream sector was crucial for slowing the declining rate of oil and gas production.
“We need an investment [upstream] to hold the declining rate of oil and gas production at 11 percent per year,” he said, adding that there are 12 projects in the pipeline set to produce this year.
Meanwhile, the government has set this year’s target for lifting or ready-to-sell production at 775,000 barrels of oil per day (bopd) and 1.25 million barrels of oil equivalent per day (boepd).
In 2018, 776,000 bopd was lifted, 97 percent of the full-year target of 800,000 bopd. Meanwhile, gas lifting only reached 1.13 million boepd, 94.6 percent of the 1.2 boepd target.
Dwi, a former boss of state-owned energy holding company Pertamina, said that SKKMigas would ensure the development of upstream projects, whether through exploration activities or intervening to jack up production in onstream units.
“We need to prepare the enhanced oil recovery [EOR] activities and to maintain good cooperation with KKKS [oil and gas contractors] in order to help them achieve the lifting target,” he added.
This year, SKKMigas is also in the process of enhancing cooperation between United States energy company Chevron and Pertamina for the transition of operations in the Rokan Block, Riau, which is known as the country’s most productive oil block.
The government decided last year that Pertamina would begin operating Rokan in 2021. The block was previously operated by Chevron for at least 50 years.
“Pertamina has to immediately invest in the Rokan Block and last week we started to discuss about when the firm will start [to invest],” Dwi said.
