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Indonesia to double development drilling in 2021 amid recovering crude prices
Indonesia plans to drill new development and exploration wells this year to offset the decline rate of its mature oil and gas fields, taking advantage of recovering global crude prices.
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The Oyong oil and gas rig in the Sampang Block, located in the Madura Strait off the coast of East Java, is seen in this 2020 handout photograph. (SKK Migas/SKK Migas)
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he Indonesian government estimates that the national oil and gas industry will drill 616 new wells this year as global crude oil prices begin recovering. The target is the highest since 2014 and a 150 percent increase from last year’s drilling activities.
Brent Crude, the global price benchmark, hit US$56 per barrel on Thursday, higher than the 2020 average price of $41.69 per barrel, according to the US Energy Information Administration.
The head of the Upstream Oil and Gas Regulatory Task Force (SKK Migas), Dwi Soetjipto, said on Wednesday that the new development wells aimed to stall the declining output from existing oil and gas fields in the country.
Development wells are drilled in areas with proven oil and gas reserves as opposed to exploration wells, which are drilled to find new reserves. The plan to drill new development wells is one of SKK Migas’ strategies to squeeze out as much oil as possible from the existing fields while exploring new fields to ultimately raise Indonesia’s oil production.
“In 2021, we will be back on track after a pretty sharp decline between 2014 and 2017,” Dwi told lawmakers at a House of Representatives hearing in Jakarta.
SKK Migas, he continued, expected the industry to drill 43 exploration wells this year.
Read also: Pertamina opens up new oil and gas well despite weak oil prices
