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SKK Migas Mid-Year Review (2) – Falling oil and gas exploration activities alarming

JAKARTA ( – The Special Task Force for Upstream Oil and Gas Business (SKK Migas) warns of falling realization of exploration activities, in particular survey and drilling programs, to discover oil and gas reserves. If this trend sustains, it could lead to declining discovery of oil and gas reserves and threatening sustainability of oil and gas productions in the future.

“The seismic survey programs realization were significantly lower than planned,” Chairman of SKK Migas Amien Sunaryadi said.  The falling exploration activities were partly due to lower oil and gas price.

He said SKK Migas has asked oil and gas production sharing (PSC) contractors to submit revised Work Plan and Budget (WP&B) earlier and most of them have done so.

“Based on the revised WP and B, most of them revised down exploration programs, however, planned programs that are related with production are mostly unchanged,” he said.

The SKK Migas data shows that off the planned 46 seismic survey programs to be carried in the first semester, only 12 programs were realized. As for the exploration drilling programs, only 26 programs were realized so far out of planned 157 drillings activities for full year.

The realization of 2D and 3D seismic surveys were far lower than planned. Out of planned 33 programs for 2D seismic survey, only 8 programs were realized, with a length of 2,370 kilometers out of planned 9,612 kms.

Out of planned 13 programs for 3D seismic survey, only 4 programs were realized so far, with a length of 425 kms, out of planned 5,995 kms. In total, only 12 seismic survey programs that have been realized in the six months to June, out of planned 46 programs.

SKK Migas therefore expects realization of drilling programs to be at 71 programs for full year, far lower than planned 157 drilling programs set in the WP & B.

The realization of the drilling of development wells, however, were progressing well. Out of planned 628 development wells drilling, 294 programs have been realized in the first half, or 47 percent of full year plan. The work-over service on existing wells also went ahead quite well. The realization of work-over programs reached 42 percent (566 wells) of the planned of 1,113 wells set for full year.

“The biggest obstacles in low level of realization are problems related with permit and land clearing,” he said. The other problems are related with slow procurement process and revaluation of subservice.

Given the above condition, Sunaryadi called on related parties to support oil and gas companies to realize their exploration programs that have been set.

The Indonesian Energy and Mineral Resources Minister Sudirman Said has earlier set up a special team called, National Committee for Exploration, to help boost exploration programs, chaired by Andang Bachtiar. On Thursday, Bachtiar said to address future energy crisis, exploration activities need to be boosted. “The biggest challenge is to convert the potential reserves of 222 billion barrels of oil equivalent into a proven reserves,” he said.

Industry players have said that many potential reserves are located in deep-water and remote areas, therefore the government need to provide incentives to encourage oil and gas companies to carry out risky exploration programs. (*)

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