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New SKKMigas deputy chairman vows to boost production
Former operations director at the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas), Fatar Yani Abdurrahman, was promoted on Monday as the task force’s new deputy head with a renewed commitment to push upstream oil and gas production
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span>Former operations director at the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas), Fatar Yani Abdurrahman, was promoted on Monday as the task force’s new deputy head with a renewed commitment to push upstream oil and gas production.
Fatar, who replaced retired official Sukandar, told reporters in Jakarta that his approach would focus on “kicking around here and there” stalled oil and gas projects in the country such as those in Riau Islands and East Java provinces.
Fatar said his priority was to increase oil production, which has continued to decline annually. “But we are optimistic that the production can be increased, just like in the Banyu Urip block,” he told reporters after his appointment ceremony in Jakarta on Monday. Energy and Mineral Resources Minister Ignasius Jonan also installed 10 other lower ranking SKKMigas and energy ministry officials during the event.
The oil production in the Banyu Urip field operated by Exxonmobil Cepu Limited is expected to increase to 235,000 barrels per day (bpd) next year from 225,000 bpd at present thanks to new oil findings.
Statistics Indonesia (BPS) data shows the country’s oil and gas trade deficit hit US$12.7 billion last year, up 45 percent on the previous year. Indonesia has no choice but to increase its production in order to reduce imports.
However, following a recent oil spill, Fatar said SKKMigas would lower its oil production target to between 97 and 98 percent of an initially targeted 775,000 bpd throughout this year. The revised target translates to between 751,750 and 759,500 bpd.
A leak in one of the wells in Pertamina’s Offshore North West Java (ONWJ) block in Karawang, West Java, spilled about 108,000 bpd as of last week. The leaked well has the potential to produce 3,000 barrels per day.
“But we are still optimistic. We’ll keep chasing the target. We’ll scrape everywhere,” said Fatar.
Energy observer Fahmy Radhi, a professor at Gadjah Mada University (UGM) in Yogyakarta, told The Jakarta Post that the revised oil production target was realistic considering the shut-down of several oil wells in the affected area.
“According to historical data, production targets over the past five years — even without an oil spill — have never been reached,” he added.
As for gas production, Fatar said it “would not be far from” the targeted 1.25 million barrels of oil equivalent per day (boepd) even though a recent case related to liquefied petroleum gas (LNG) absorption might be detrimental to meeting the target.
SKKMigas reported in July that state utility company PLN canceled a deal to purchase 11 cargo loads of LNG produced by a refinery in Bontang, East Kalimantan, whose production capacity is now limited because of the unpurchased LNG.
PLN, which canceled the contract following falling global LNG prices, has since agreed to purchase five cargos but this still left seven cargos unsold.
Minister Ignasius also urged the newly appointed SKKMigas officials to push oil and gas contractors (KKKS) to develop human resources, “especially for big developments such as the Masela block”.
“For the next five years, the government’s vision is building human resources,” said Ignasius at the ceremony, “We are obligated to build human resources especially for employees and people living around project sites.”
