Jakarta, CNBC Indonesia – Indonesia’s petroleum production continues to show shrinkage, in data from the Ministry of Energy and Mineral Resources (ESDM) as of November 4 2023, daily national oil production has only reached 578,103 barrels per day (bpd) or far from the 2023 oil production target of 660,000 bpd.

If we look back, national oil production is even below production levels in the 1968 era.

RI oil production in 1968, based on BP Statistical Review data, was recorded at 599,000 bpd, before experiencing a continuous increase which reached peak production in 1977 of 1,685,000 bpd, then the second peak production of 1,669,000 bpd in 1991. until then it continued to decline gradually.

Meanwhile, before 1968, Indonesia’s oil production was still at the level of 400 thousand barrels per day. Here’s the data:

1965: 486,000 bpd
1966: 474,000 bpd
1967: 510,000 bpd
1968: 599,000 bpd
1969: 642,000 bpd
1970: 854,000 bpd

When compared with average oil production data for January-September 2023, daily oil production also shows a decline. Quoting data from the Ministry of Finance (Kemenkeu), until September 2023 oil production will reach 608.6 thousand barrels per day (bpd). As of October 31 2023, the Ministry of Energy and Mineral Resources recorded oil production of 582.69 thousand bpd.

Meanwhile, oil lifting in Semester I-2023, based on data from the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), was recorded at only 615.5 thousand bpd, or 93% of the target in the 2023 APBN of 660 thousand bpd.

Meanwhile, Indonesia’s actual oil production in 2022 was recorded at 644,000 bpd.

So, why does Indonesia’s oil production continue to decline?

Previously, Minister of Energy and Mineral Resources Arifin Tasrif explained that the decline in national oil production was because oil wells in Indonesia were old, so the ratio of water to oil was greater when produced.

“So it’s true that our wells are old, yes, the wells are indeed old. The longer the oil is pumped, the deeper it gets, and the mixture with water becomes more and more. So what was pumped used to be 10 liters of oil, 9 liters of oil, but now it is “For decades, half a liter of oil has been half a liter of water,” explained Minister Arifin at the Ministry of Energy and Mineral Resources Office, Jakarta, quoted on Tuesday (7/11/2023).

Currently, the government continues to strive to maintain daily domestic oil production by maximizing old wells by deepening drilling. One thing that has been done is to increase production from non-conventional oil wells (MNK), one of which is in Gulamo.

“But for this addition there must be new additions, that is now in Gulamo, that is unconventional or MNK. So far the indications are that there is hope in Gulamo, because drilling has been completed,” he said.

Founder & Advisor of the ReforMiner Institute, Pri Agung Rakhmanto, explained that the decline in national oil production was caused by several factors. One of them is because Indonesia’s oil and gas production still relies on old fields.

Therefore, the increase in crude oil prices on the global stage will not have a significant effect on increasing production. However, an increase in oil prices will help from an economic perspective.

“What will increase production is if there is investment and production from new fields on a large scale, such as those in the class of the Cepu or Rokan Blocks, for example. The exploration or EOR efforts must first be successful in large fields of that class, then production will be able to increase,” Pri said to CNBC Indonesia, quoted Wednesday (8/11/2023).

Likewise, Chairman of the Aspermigas investment committee, Moshe Rizal, assessed that the decline in oil production that continues to occur in Indonesia is because the majority of oil and gas fields in Indonesia are quite old. So, in terms of production, it will continue to experience a natural decline.

“However, this does not mean that there is no longer the potential for Indonesia to increase production, because the potential for oil and gas that has not yet been explored or produced is still very large, it just requires a large amount of investment,” said Moshe.

Moshe detailed that there are at least two things that can reduce the decline in national oil production. First, namely optimizing existing production, such as workover wellsincreasing productivity and utilization of abandoned wells (abandon wells) with re-entry.

Then the second is by accelerating the monetization of oil and gas field development plans or Plan of Development (PoD). “And to increase national production, there are also two things, namely the implementation of technology Enhanced Oil Recovery (EOR) and exploration to discover new reserves,” he added.

Difficult to Achieve Target

Therefore, he also encouraged the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) as the regulator in the upstream sector, to simplify the processes that Cooperation Contract Contractors (KKKS) need to go through. Especially in carrying out its activities in Indonesia.

“It is necessary for SKK Migas to take back its role as holder of mining authorization rights, namely being responsible for processing permits and land acquisition, KKKS as the name suggests is only a government contractor who is responsible for all technical matters and also funding,” said Moshe to CNBC Indonesia, quoted Wednesday (8/11/2023).

Meanwhile, Oil and Gas Practitioner Hadi Ismoyo believes that it is quite difficult to realize the oil lifting production target as set out in the 2023 APBN. Bearing in mind that this year’s oil lifting target is at the level of 660 thousand barrels per day (bpd). “The projections until the end of the year are estimated to be very difficult to achieve the APBN target of 660 thousand bpd,” Hadi told CNBC Indonesia, quoted Wednesday (8/11/2023).

In fact, according to Hadi, until the end of 2023, it is projected that national oil production will actually be below 620 thousand bpd with an estimate of 609 thousand bpd. Meanwhile, for oil lifting, it is projected that by the end of this year it will only be at the level of 591 thousand bpd.

New Oil Reserves

Hadi said that currently Indonesia can rely on available oil blocks, especially in the Eastern Indonesia region, namely the Warim Block, East Natuna Block and several other oil blocks. “There are still many, especially in eastern Indonesia, for example in the Warim Block, Natuna East, blocks which are very important to explore,” explained Hadi.

However, Hadi said that it takes courage to be able to explore oil deposits in several new basins in the country. Currently, Indonesia still has up to 120 basins that have the potential to contain crude oil which could boost daily production in the country.

[Gambas:Video CNBC]

(pgr/pgr)