Management of upstream oil and gas industry still not conducive

Management of upstream oil and gas industry still not conducive

Photo document of Sukowati oil industry in Ngampel village, Kapas sub-district, Bojonegoro district, East Java province. (ANTARA/Aguk Sudarmojo)

"So, the upstream oil and gas industry is in a state of emergency."
Jakarta (ANTARA News) - The management of the upstream oil and gas industry is not conducive, and there has been a decline in the rate of oil production, said an observer on Friday.

An observer at the ReforMiner Energy Institute, Pri Agung Rakhmanto, said if the industry is managed properly, the rate of oil production can be increased. According to him, the government has not tapped into the potential of oil and gas basins.

According to the Oil and Gas Implementation Task Force (SKK Migas), the current rate of oil production is around 830,000 barrels per day, below the target set for 2013 - 900,000 barrels per day.

In fact, the task force`s chief, Rudi Rubiandini, said the golden era had recorded the highest level of oil production at over one million barrels per day.

According to Rudi, this year`s rate of oil production is estimated to reach 830,000-850,000 barrels per day.

"The level of oil production that we witness today is the result of erroneous governance of the upstream oil and gas industry. Hence, the oil and gas exploration climate has become unattractive," said Pri Agung.

Rudi said even if a large-scale oil reserve was discovered, benefits of oil production could only be reaped in the next 4-5 years. Sadly, a large-scale oil reserve has not been discovered yet.

On the other hand, the enhance oil recovery (EOR) activity is in its testing phase.

"So, the upstream oil and gas industry is in a state of emergency," he said.

Therefore, Pri Agung has urged the government and the House of Representatives to speed up the Oil and Gas Law revision in order to provide legal certainty for investors. This way, regulations on oil and gas exploration and exploitation activities will be standardized.
(Uu.A050/KR-BSR/H-YH)

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