Oil and gas investment amounted to US$2.63 billion in the first quarter of 2023, up 25 percent year-on-year (yoy), thanks to relatively high global oil prices, according to SKK Migas head Dwi Soetjipto.

Despite the significant increase, the investment amount is only 16.9 percent of the $15.54 billion target set for 2023.

Dwi sees global crude oil prices trading between $65 and $98 per barrel this year, with the upper end of that range to be reached if supply falls due to dwindling Russian exports at a time of soaring global demand.

“Good oil prices are expected to encourage more aggressive investment. But if there were to be an increase in inflation worldwide, global investors might hold back, due to a risk of crisis,” he said, adding geopolitical uncertainty made it difficult to predict oil prices.

“But in the next few years, we will use the $80 figure as reference to forecast future oil prices.”

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Oil prices dropped on Monday as the US dollar strengthened and investors mulled over a possible May interest rate hike by the United States Federal Reserve (Fed), which could dampen hopes of economic recovery.

On Wednesday, global benchmark Brent crude futures were trading slightly below $85 and US West Texas Intermediate (WTI) crude futures slightly below $81 a barrel.

Both contracts saw a fourth weekly gain in a row last week, the longest such streak since mid-2022.

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Oil lifting in this year's first quarter amounted to 613,700 barrels of oil per day (bopd), 7.5 percent lower than the targeted 660,000 bopd, due to unplanned shutdowns at major oil and gas fields, according to SKK Migas exploitation deputy Wahju Wibowo.

Meanwhile, gas production amounted to 5,399 million metric standard cubic feet per day (mmscfd), or 14 percent lower than the target of 6,160 mmscfd, according to the same data.

In the first quarter, unplanned shutdowns took place at Pertamina Hulu Energi Offshore Southeast Sumatra (PHE OSES), a subsidiary of state-owned oil and gas giant Pertamina, due to an oil pipeline leak, causing an estimated decline in oil production of 10,000 bopd.

Meanwhile, ExxonCepu Limited (EMCL) oil field saw an unplanned shutdown due to a landslide, an incident estimated to cut oil production by 10,000 bopd.

“We saw a considerable number of unplanned shutdowns in March,” Wahju said.

In 2022, Wahju said SKK Migas had conducted a performance audit on a number of oil and gas contractors (KKKS) in response to the unplanned shutdowns.

With the industry facing similar challenges today, Wahju said, the audit would continue, but with different KKKS.

The government aims to push nationwide upstream production to 1 million bopd and 12,300 mmscfd of gas by 2030 in a bid to achieve energy independence.

To boost oil and gas lifting, SKK Migas had planned to carry out drilling for 991 wells by the end of the year, but that target has since been revised to 911 wells, given delays in some of the drilling projects, including in Pertamina’s Rokan working area.

Wahyu explained the cessation of drilling at Rokan had had an impact on the operation of the rig.

“Pertamina is checking the impact of fatality incidents at Pertamina Hulu Rokan; there are approximately 100 rigs there,” Wahju said.

In the first quarter, drilling work was realized at 167 wells.