Output drop: in Indonesia
Indonesia 'won't hit output targets'
Indonesia is unlikely to meet its crude oil and condensate production targets this year and next, an official at energy watchdog BPMigas said, due to unexpected technical hitches, ageing fields and under-investment.
The government targeted crude and condensate production of 960,000 barrels per day this year, rising to 965,000 bpd next year in the approved state budget.
But now it looks more likely that Indonesia, which pulled out of Opec last year, will struggle to produce 950,000 bpd, an official told Reuters.
Oil production, which was about 1.5 million bpd in the 1990s, has slumped to about 820,000 bpd currently, and the country became a net importer of crude oil in recent years.
"The crude oil and condensate production may not reach 960,000 bpd this year. That is because of many problems with the oil wells," Amir Hamzah, head of public relations division at BPMigas, told Reuters.
"Some wells have been shut down due to technical problems during this year, plus there was a natural decline from ageing wells, which caused production to fall," he added.
Several major players including Chevron, ConocoPhillips and France's Total operate in Indonesia. But failure to attract investment and develop new fields, partly a reflection of an uncertain business climate, means Indonesia relies on old fields with diminishing output.
A mines and energy ministry official, who declined to be quoted by name, said the target for 2010 would be very difficult to achieve because output from the country's older production wells is declining about 10% to 15% per year.
"The country is in the process of seeing declining oil production and we cannot avoid it, while new production cannot compensate for the decline," the official said.
Indonesia has offered new exploration rights and has said it will offer new incentives to oil and gas investors, including more favourable tax treatment and production split, in order to encourage exploration. But industry players have said the incentives are not enough.
Indonesia signed only 21 oil exploration contracts this year, compared with 34 contracts the previous year.
Proven and potential oil reserves dropped to 8.3 billion barrels this year, from 9.6 billion barrels in 2001.
Crude production slipped to 824,200 bpd in November, from 828.400 bpd in October, while condensate output rose to 129,000 bpd in November from 120,000 bpd in the previous month.
