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Upstream oil & gas industry books revenues of US$ 31.315 bln

JAKARTA (RAMBU ENERGY) – The upstream oil and gas industry has recorded the state revenue of US$ 31.315 billion throughout 2013. The state revenue reached 99 percent of the targeted State revenue as set out in the Revised State Budget of 2013 i.e. US$ 31.7 billion.

This was revealed by the Acting Chairman of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) J. Widjonarko in SKK Migas year-end press conference.

“A number of obstacles, among others, subsurface problem and gas absorption by buyer which is lower than the commitment, have become the factors hampering the achievement of production which eventually affect the realization of the state revenue,” Widjonarko elaborated.

The Revised State Budget of 2013 targeted oil lifting of 840,000 barrels per day (BOPD) and gas lifting of 7,175 million British thermal unit per day (MMBTUD). Meanwhile, the lifting outlook until end of 2013 was 826,000 BOPD (98 percent of the Revised State Budget) for oil and 6,981 MMBTUD (97 percent of the Revised State Budget) for gas.

The subsurface problem has led to a loss of the biggest potential production, i.e. around 35,000 BOPD. This problem is in the form of decline rate at the existing field reaching 4.1 percent in average, specifically at the mature fields in Rokan and Mahakam blocks with their decline rate exceeding 5 percent.

The other significant obstacle is gas absorption by buyer which is lower that the commitment. There are 15 gas buyers performing gas offtake below the commitment due to the facility and network problems. These problems have contributed to the loss of potential production of approximately 420 million cubic feet of gas per day (MMSCFD) or 75,000 barrel oil equivalent per day (BOEPD).

Widjonarko added that in fact SKK Migas and Contractors of Cooperation Contract (KKKS) have made some efforts to optimize the achievement of 2013 production target, among others, performing development, work over, and well service drillings that managed to generate additional production of 93,900 BOPD and to reduce the frequency of unplanned shutdown by optimizing maintenance activities of any facilities contributed to a production of 8,600 BOPD.

For exploitation drilling, the upstream oil and gas industry targeted this year in the revision of the work program and budget to drill 1,107 development-wells, 953 workover-wells, and 29,642 well services. From such target, the realization of exploitation drilling was 980 development-wells; 779 workover-wells; and 26,749 well services. Meanwhile, the realization of exploration drilling was 91 wells of the targeted 121 wells. Obstacles being dealt with are among others land clearing permit, procurement process, rig schedule, location preparation, and subsurface evaluation.

For seismic activity, the upstream oil and gas industry has targeted 2D seismic survey of 15,647 km and 3D seismic survey of 22,576 km. Out of this target, the realization thereof is 11,949 km or 76 percent for 2D seismic survey and 14,177 km or 63 percent for 3D seismic.

Although there are some dynamics occurred in the upstream oil and gas industry throughout 2013, the number of investment has shown an increase. The investment outlook until end of 2013 was around US$ 19,342 billion or increased of approximately 17 percent compared to last year investment of US $16,543.

“The investment certainly experienced such a significant increase within the last three years,” Widjonarko concluded. (*)

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