SKK Migas Together With KKKS Focus On Increasing Production Amid Heavy Challenges 2024

JAKARTA - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) together with Cooperation Contract Contractors (KKKS) is focused on increasing oil and gas production amid challenges in 2024.

Head of SKK Migas Dwi Soetjipto, through his statement, in Jakarta, Monday, August 5, said that he emphasized the importance of close collaboration between the government and the KKKS in achieving national targets, especially related to oil and gas production and lifting.

He acknowledged that Indonesia's oil and gas production currently faces significant challenges.

"From the 2024 lifting target of 635,000 BOPD (an oil barrel per day) for oil, the current realization has only reached 579,000 BOPD. As for gas, from the target of 5,785 MMSCFD (million cubic feet per day), currently it has only reached 5,366 MMSCFD. There are still shortcomings that need to be addressed immediately," said Dwi, quoted from Antara.

The government considers this condition a national crisis and emphasizes the need for aggressive steps in overcoming production and lifting obstacles. SKK Migas is committed to increasing supervision and taking firm action to ensure KKKS programs run according to plan.

"We emphasize to all the highest leadership of the KKKS to carry out the commitment of the work program that has been agreed upon. This is important to achieve the year-end target for oil of 594,000 BOPD, which will affect our entry point in 2025 which is planned to be in the range of 634,000 BOPD," said Dwi.

As for gas, although gas lifting year-to-date is at 5,366 MMSCFD, but on July 25, 2024, daily lifting has reached 5,919 MMSCFD, reaching 2 percent above the APBN lifting target of 5,785 MMSCFD.

"We also focus on accelerating additional production of 174 MMSCFD, especially from KKKS HCML and Pertamina EP Cepu. In addition, maintaining operational stability to avoid an unplanned shutdown is very important, so we remain optimistic to achieve a gas lifting outlook of 5,544 MMSCFD," said Dwi.

Despite these challenges, he sees the upstream Indonesian oil and gas industry still showing promising prospects. This is reflected in the findings of exploration in 2023, with discoveries in the North Gang structure and Screening having placed Indonesia at the top of the list of the largest discoveries in Southeast Asia from 2020 to 2024.

"We also see enthusiasm in terms of investment. We predict that starting this year and in the next few years, Indonesia will lead upstream oil and gas investment in Southeast Asia, driven by significant discoveries and the government's commitment to improving the investment climate," said Dwi again.

In order to evaluate the performance of the upstream oil and gas industry in the first semester of 2024 and discuss the long-term plan of the sector, SKK Migas together with KKKS have also held the 8th CEO of the Forum in Bogor, West Java, Saturday, August 3.

Dwi said that in the forum there was a process of intensive discussion and information disclosure between SKK Migas and KKKS which aimed to strengthen collaboration in order to achieve the joint target.

"We also provide opportunities for KKKS leaders to provide input, appreciation or ask SKK Migas for assistance regarding the problems facing the KKKS," he said.

In the forum, SKK Migas and KKKS leaders also signed various commitments that had been agreed to achieve the 2024 oil and gas production target.

These commitments include implementing WP&B 2024, mitigating critical issues, short-term initiatives, health, safety and environmental standards, optimizing planned shutdowns, reactivation of wells, accelerating commercialization, improving asset management, and government support.