Jakarta (Antara News) - Indonesia needs to boost oil exploration activities to find new oil fields and increase domestic production, so that it can reduce its increasing oil imports.

So far, state-owned oil firm Pertamina has to import some 350 thousand barrels of oil per day (bpd) to meet the countrys need for the commodity.

Indonesia needs about 1.6 million barrels of oil for its consumption per day, while its domestic production is only about 820 thousand barrels per day.

It is predicted that Indonesia could import up to 1.8 million barrels per day in 2020.

"If we fail to explore and find new oil fields, we can become the biggest oil importer in Southeast Asia," the senior operation manager of the Joint Operation Board of PT Bumi Siak Pusako (BSP) and state-owned oil firm Pertamina Hulu, Novi Sugiyanto, was quoted by Liputan6.com as saying on Sunday.

He said Indonesia had to import oil to meet the need for fuel of its domestic consumers. Unluckily however, this import was not balanced with an increase in domestic production.

The Central Board of Statistics reported that Indonesias oil import last February was US$1.13 billion or about 1.06 million tons.

Meanwhile, upstream oil and gas Regulator SKK Migas Secretary Gde Pradnyana said the number of existing oil and gas fields in the country was no longer adequate to meet the need.

"Our production has since 2004 been unable to meet consumption. Moreover, new oil fields can be in production only after years of its initial cultivation," he said.

He pointed out that the existing oil production fields had been exploited for about 40 years. "We do not have new oil fields now. In the past, we pumped oil with water content. Now we pump water with oil content," Gde Pradnyana added.

Therefore, he argued, the government needs to support oil exploration activities and provide simple licensing procedures for companies and oil/gas investors in their efforts to seek new oil wells in Indonesia.

According to Gde Pradnyana, SKK Migas has set Indonesias oil lifting at 820 thousand barrels bpd this year, after taking into account its efforts to optimize a number of oil production fields.

"Its (oil lifting) lower than what has been set in the 2014 state budget at 870 thousand bpd. Indeed, we still see other potentials, particularly those which have not yet been exploited," Gde Pradnyana said at a seminar on Tuesday.

The revision of the target from 870 thousand barrels to 820 thousand bpd was due to the fact that the oil production at the Cepu oil Block, Bojonegoro, East Java, was not in keeping with the target set for May 2014, Gde Pradnyana added.

Gde Pradnyana explained that the Cepu Block can reach a daily production of about 165 thousand barrels in full operation. However, it has to wait until November or December before it can be operated for a production capacity of 56 thousand bpd.

Now the production level of the Cepu Block is about 26 thousand bpd. The peak of its production, which can reach 165 thousand bpd, can be reached in January 2015.

It was previously targeted that the Cepu oil Block will have been in full production in May 2014. The production capacity of the Cepu has been used as an assumption to set the oil lifting at 870 thousand bpd.

"Part of the Cepu project was finished only recently. So the additional 20 to 30 thousand barrels per day cannot yet be produced," Gde Pradnyana said.

Chief Economic Minister Hatta Rajasa said last March the government wanted the Cepu oil field to fully produce 165 thousand bpd soon to support the national energy resilience.

"I do not think that it is only the government who wants it to be in full production but also all concerned parties, because it will support the national energy resilience. After all, Cepus oil reserves are 0.5 billion barrels," the minister stated.

Hatta said that the Cepu Block oil field will reach its production peak of 165 thousand bpd in 2015.

With initial production facilities, the project, since its operation from August 2009 until now, had produced a total of 36 million barrels of oil cumulatively worth US$.3.47 billion.

Currently, production from the fields, which are managed by production sharing contractor Mobil Cepu Ltd., is about 29,000 barrels of oil per day, and starting in September it is expected to increase by 10,000 barrels a day with additional facilities.

Drilling has been carried out in 49 wells, consisting of 33 oil production wells and 16 injection wells.

In response to the delay in its full production schedule, Vice President Boediono inspected the Cepu Block in Banyu Urip in Bojonegoro, East Java, late last month.

"I wanted to check the progress of the project and why it had been delayed. The project is important and strategic for maintaining or even raising the countrys oil production," the vice president said.

"If there are problems I wish they can be solved immediately so that they will not disrupt production," he added.

Acting chief of the SKK Migas J Widjanarko said the development of the project had reached 87 percent as of the third week of April 2014.

With initial production facilities, the project, since its operation from August 2009 until now, had produced a total of 36 million barrels of oil cumulatively worth US$3.47 billion, he said.

Currently, production from the fields, which are managed by production sharing contractor Mobil Cepu Ltd., is about 29,000 barrels of oil per day and starting in September it is expected to increase by 10,000 barrels a day with additional facilities.

Drilling has been carried out in 49 wells, consisting of 33 oil production wells and 16 injection wells. The drilling was completed before schedule.

The project is important and strategic with regard to the countrys energy resilience because it can contribute almost 20 percent of the total national oil production. (*)
(T.A014/INE/a014)

Reporter: Andi Abdussalam
Editor: Fardah Assegaf
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