SKK Migas: Realization Of Oil And Gas Reserves Per September 2021 Reached 83.3 Percent

Illustration. (Photo: Doc. Antara)

JARTA - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted that national oil and gas reserves as of September had reached 512 million barrels of oil equivalent (MMBOE). The achievement is only 83.3 percent of this year's target which is set at 625 MMBOE.

Deputy of Planning for SKK Migas, Benny Lubiantara, said his party estimated that the oil and gas Reserve Replacement Ratio (RRR) in November 2021 could reach 134 percent of the target.

"There will be a significant increase in oil and gas reserves which is expected to occur in November and December 2021. SKK Migas estimates that at least the RRR achievement at the end of the year is 186 percent. If the incentive proposal is approved by the Government, then the RRR achievement in 2021 is estimated to reach 240 percent", he said in a written statement, quoted Thursday, October 7th.

He added that the majority of the discussion on the plan of development (POD) went smoothly and there were no issues that needed further investigation, so it is estimated that it will be completed this month. In addition, some PODs still require approval from the operator, the Pertamina Group working areas, some of which are still under discussion in the upstream sub-holding. Then, some of them still need incentive approval from the government.

"The POD, which is still in the process of being discussed, will provide a very large additional oil and gas reserves. If everything goes smoothly, it is estimated that by the end of this year the RRR could reach 240 percent", he said.

Furthermore, Benny said that the RRR target of 100 percent as one of the key performance indicators (KPI) of SKK Migas will certainly exceed the target, it's just a matter of how much exceeding the target can be realized.

"One strategy to increase oil and gas production to accelerate resource to production (R to P), the success of the POD discussion will not only have an impact on the achievement of RRR but also an important step for efforts to increase oil and gas production according to the target in 2030, namely 1 million barrels of oil and 12 BSCFD of gas", he said.

Meanwhile, the POD proposals that still need incentive support and will provide additional large oil and gas reserves in the remaining time of this year are Jindi South Jambi B Co of 233.6 MMBOE, OPHIR Indonesia (Bangkanai) LTD of 150.9 MMBOE, Pertamina Hulu East Kalimantan (PHKT) of 149.5 MMBOE and Pertamina Hulu Sanga-Sanga (PHSS) of 273.8 MMBOE.

The total potential for additional oil and gas reserves that require incentive support is around 938 MMBOE. Benny said that the POD which has the potential to provide additional large oil and gas reserves and requires incentives comes from working areas that are currently producing.

"The submission of POD by Cooperation Contract Contractors (KKKS) in blocks that are already operating shows the large oil and gas potential in the block. Along with the increasing difficulty of getting oil and gas in the area which requires more drilling and other activities, then to get an economic level reasonable, incentive support is needed to be realized", he said.

The provision of incentives for the upstream oil and gas industry from 2020 to August 2021 has made a positive contribution to the country and increased the competitiveness of the national industry. The implementation of upstream oil and gas incentives provides additional oil and gas field development through approval of POD and the like and updating of reserves.

The positive impacts resulting from these incentives include the addition of oil and gas reserves of 465.5 MMBOE and the addition of state revenues of around US$2.9 billion or IDR 42 trillion.

In addition, upstream oil and gas incentives can increase investment in drilling and production facilities by US$3.5 billion or around IDR 50 trillion, which includes drilling 88 development wells, 15 injection wells, 32 reactivation wells, 1 step out well, and construction and installation of production facilities. The incentives also increase Indonesia's upstream oil and gas competitiveness, with the cooperation contract contractors (KKKS) also benefiting, namely revenues of US$1.5 billion or around IDR 21.75 trillion.