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SKK Migas raises investment target by 7%
Task force aims to reach $13.2 billion in 2022, up from $12.38 billion last year.
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T
he Upstream Oil and Gas Special Regulatory Task Force (SKK Migas) has set a higher upstream oil and gas investment target this year.
The investment target for 2022 was US$13.2 billion, up from the $12.38 billion target set for 2021, SKK Migas head Dwi Soetjipto said in a virtual press conference on Monday.
The $13.2 billion target includes production, exploration and development activities at $8.4 billion, $1 billion and $2.9 billion, respectively.
“It takes effort, and there must be an increase in production, exploration and development activities,” Dwi said, adding that SKK Migas would continue to carry out fiscal improvements and provide incentives to boost upstream oil and gas investment.
“Raising the investment target for 2022 is critical to achieving the targeted oil output of 1 million barrels of oil per day [bopd] and gas output of 12,000 million standard cubic feet per day [mmscfd] by 2030,” he said.
Read also: Upstream energy M&A expected to skyrocket in 2022
The task force previously estimated that Indonesia needed $250 billion over a 10-year period to achieve its goals.
Attracting upstream investment is getting increasingly challenging as oil and gas multinationals have begun to shift some of their resources to renewables.
“The shift to renewables will be a challenge for the next decade,” said SKK Migas deputy head Fatar Yani in a virtual press conference on July 16 last year.
Oil and gas investment in 2021 reached $10.7 billion, or 86.4 percent of the $12.38 billion target set in the state budget, according to SKK Migas data.
Foreign and domestic investment into oil and gas exploration in Indonesia has been on a declining trend over the last five years, SKK Migas data show.
Exploration investment declined from $1.2 billion in 2016 to $0.7 billion in 2020, before improving slightly to $0.8 billion last year.
Read also: Green energy shift risks upstream oil, gas investment: SKK Migas
Meanwhile, oil and gas lifting is targeted at 703,000 bopd and 5,800 mmscfd of gas in 2022, after the targets for both were missed in 2021.
“There was pressure from the pandemic amounting to [reduced output of] 20,000 barrels per day,” Dwi said.
Lifting, or ready-to-use production, reached 1.6 million barrels of oil equivalent per day (mboepd), or 96 percent of the 1.7 mboepd target set out in the state budget. The output comprised 660,000 bopd in oil and 5,501 mmscfd in gas, equal to 93.7 percent and 97.6 percent of the respective targets.
State revenue from the oil and gas industry reached $14.03 billion in 2021, which is 193 percent of the $7.28 billion target set in the state budget.
