1st Quarter 2020, 136.5 Million BOE O&G Reserves Found in 3 Fields

MINISTRY OF ENERGY AND MINERAL RESOURCES
REPUBLIC OF INDONESIA
PRESS RELEASE
Number: 156.Pers/04/SJI/2020
Date: 18 April 2020

1st Quarter 2020, 136.5 Million BOE O&G Reserves Found in 3 Fields

Ministry of EMR again recorded successful oil and gas (O&G) exploration with the discovery of O&G reserves in 3 fields during the 1st quarter of 2020. Based on the report from Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), the reserves are estimated to reach 136.5 million Barrels of Oil Equivalent (BOE).

Head of SKK Migas, Dwi Soetjipto, explained Texcal Mahato found an oil reserve containing 61.8 million barrels of oil after completing the drilling of PB-2 exploration well in Mahato Block. Next, Medco E&P found 79 Billion Cubic Feet of Gas (BCFG) from the drilling of Bronang-2 well. The discovery in Bronang Field will support the development of Faroel Field so that production can reach up to 10,000 Barrels of Oil per Day (BOPD).

Finally, Pertamina EP (PEP) found a gas reserve holding 333.6 BCFG from the completion of Wolai-002 well exploration in Banggai, Central Sulawesi. "I hope Production Sharing Contract (PSC) Contractors will immediately submit the proposal for Plan of Development," said Dwi when he presented SKK Migas performance in the 1st quarter of 2020 on Thursday (16/4) in Jakarta.

Overall during the 1st quarter of 2020, a comparison between O&G reserves discovered and those produced (Reserve Replacement Ratio/RRR) in Indonesia shows an increase from the previous month. Until 31 March, the O&G RRR in Indonesia reached 47.5 million barrels of oil equivalent. The increase is inseparable from the discovery in OPLL Field in West Natuna, especially in March, of 6%.

Meanwhile, Dwi admitted O&G production within the next year would be more difficult due to economic slowdown from Covid-19 pandemic. "In the future, O&G lifting will be more reduced by Covid-19 and low oil prices," said Dwi.

Therefore, SKK Migas and PSC Contractors have estimated a decrease in revenue, too. "The outlook of gross revenue will also drop, from USD32 billion to USD19 billion," Dwi stated. Decreasing gross revenue results from oil price condition and the change in policy paradigm in that the O&G sector is no longer the source of state revenue but is instead an economic mover.

Anticipating Activity Reduction

The government and SKK Migas are anticipating regulating upstream O&G activities amid the Covid-19 pandemic which is followed by the world's weakening oil prices, among others:

First, SKK Migas will immediately coordinate with PSC Contractors to review works in 2020. The review will consist of re-negotiating PSC's current contracts to create cost efficiency.

Second, to make comprehensive assessment of oil price options to calculate the actual scale of economies.

Next, to re-evaluate the delay in Planned Shutdown and to consider giving stimulus packages to PSC Contractors.

Finally, to coordinate with the relevant stakeholders to exempt goods and personnel mobilization of the upstream O&G industry during the Covid-19 pandemic. "If the upstream O&G business continues to be active, it can become a vein of the national economy amid economic slowdown," Dwi concluded. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi (08112213555)

Share This!