Having 15 Oil And Gas Projects That Will Operate This Year, The Head Of SKK Migas Asks KKKS To Commit To Implement The 2024 Work Program

Head of SKK Migas, Dwi Soetjipto (doc. SKK Migas).

JAKARTA - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) held the 2024 Forum CEO's activity with the theme Boosting Investment for Massive Exploration & Future Growth in Indonesia Upstream Oil and Gas.

At the event, the Head of SKK Migas and all KKKS CEOs also signed a commitment agreement to implement WP&B in 2024.

The agreement confirms that the KKKS is committed to implementing the 2024 WP&B with an aggressive, efficient, and scheduled approach.

In the document, it is also stated that SKK Migas will provide maximum support to KKKS in the implementation of all WP&B in 2024.

The head of SKK Migas, Dwi Soetjipto, said that in 2023, the joint commitment between SKK Migas and KKKS resulted in upstream oil and gas investment in Indonesia in 2023 of US$ 13.7 billion, which is the highest investment achieved in the upstream oil and gas industry in Indonesia in the last seven years.

"This achievement is also 13 percent higher than upstream oil and gas investment in 2022 and twice the global upstream oil and gas investment trend of 6.5 percent. More than that, this achievement is also 6 percent higher than our target in the long term plan 2030."

"This extraordinary result will not be achieved without our collective efforts in overcoming industrial challenges and collaboration between stakeholders. We hope that this positive trend can be achieved again in 2024," said Dwi on Saturday, February 3, 2024.

Dwi further revealed that one indicator showing that the upstream oil and gas industry in Indonesia has developed is the increase in drilling activities and onstream projects.

The realization of development well drilling managed to reach the highest figure in the last eight years with 799 wells drilled in 2023.

"Over the last six years, we have also managed to achieve a Reserves Replacement Ratio (RRR) of more than 100 percent, through the approval of 30-40 POD/OPL/OPLL every year. The achievement of RRR in 2023 is 123.5 percent and for 2024 RRR is targeted to reach 166 percent. This shows the sustainable development of the upstream Indonesian oil and gas industry," said Dwi.

Dwi also explained that currently upstream oil and gas has five national strategic projects underway with a total investment value of 45.09 billion US dollars. In addition, until 2029 there will be 95 oil and gas projects with a total capital expenditure of 3.28 billion US dollars.

"For 2024, it is targeted that 15 projects will operate which will increase production capacity by 41,922 BOPD (oil barrel per day) and 324 MMSCFD (million standard cubic feet per day) of gas."

"Additional production of these projects is very important in meeting this year's targets. Therefore, it is important not to delay the completion of these projects," said Dwi.

Regarding exploration activities, Dwi emphasized that SKK Migas together with KKKS in the future will carry out strategies to increase exploration activities, including changing exploration targets from small-middle to middle-sized, and focusing on developing non-conventional oil and gas opportunities.

"Based on this strategy, I ask for KKKS' commitment so that activities and investment in exploration can run aggressively. Hopefully we can find large reserves again, especially in deep sea areas," he said.

In 2023, SKK Migas together with KKKS managed to drill the most explorations since 2017 with 38 wells. In 2024, the exploration well drilling target is 48 wells or an increase of 171 percent since 2020.

This increase in activity is also reflected in the increase in exploration investment.

"We managed to return to the global upstream oil and gas industrial map through two major discoveries in the world, namely the North Gang and the Screen. This is the largest discovery in Indonesia since the discovery of the Eternal Field in 2000."

"We must maximize this momentum by exploring more opportunities and turning them into production that will benefit Indonesian investors and the economy," said Dwi.

Dwi said that the biggest challenge in achieving the current oil production target is that the KKKS is still focused on maintaining the natural decline from the existing field. Meanwhile, to turn reserves into production, it is also hampered by the problem of stalled POD and delayed projects.

"SKK Migas requires the KKKS' commitment to implement POD and complete the project on time. As for gas, we also need to overcome challenges in the form of project delays and absorption from buyers," concluded Dwi.