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Indonesia needs $6 billion to boost oil production to 1 million bpd
Indonesia’s oil industry hit its peak during between the 1970’s and 1980’s, when oil production exceeded 1 million bpd and oil exports drove economic growth.
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Workers carry out routine activities at PT Saka Energi Indonesia’s oil well in the Pangkah oil field in Gresik, East Java. According to the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas, oil and exploration investments consistently declined from $3.04 billion in 2013 to $567.5 million in 2017 before improving to $786.2 million last year. (Antara/Moch Asim)
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ndonesia needs to raise at least US$6 billion in investment over the next 10 years to boost domestic oil production to 1 million barrels per day (bpd) by 2030 as targeted by the government, a business association has estimated.
“Hundreds of exploration wells need to be drilled,” John Karamoy, the chairman of the Oil and Gas Companies Association (Asper Miga) at an industry discussion in Jakarta on Oct. 10.
He said the estimate, which averages out at $600 million per year, was based on the assumption that Indonesia, as a mature oil and gas producing country, could find one oil discovery for every five drills.
“In other countries, it’s eight drills for one discovery. We’re a mature [oil producing] country, so the geography is quite well known,” he told The Jakarta Post.
Indonesia’s oil industry hit its peak during between the 1970’s and 1980’s, when oil production exceeded 1 million bpd and oil exports drove economic growth. But production has been steadily declining and was last recorded at 754,000 bpd in August this year, according to Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) data.
Sourcing the funds to achieve 1 million bpd production remains a major problem for the industry, said John.
Data from SKK Migas, which is the government agency that set the oil production target, shows that foreign and domestic investment into oil and gas exploration in Indonesia has been generally declining over the past five years.
