Indonesia’s oil and gas industry will continue to face challenges this year as the government projects lower crude oil prices, production and investment while demand continues to grow.
The government projects this year’s oil and gas production rate to reach 1.95 million barrels of oil equivalent per day (boepd) and Indonesian Crude Prices (ICP) at $58 to $63 per barrel. Both are lower than last year’s expectations of 2 million boepd and $70 per barrel.
“With a high sensitivity toward global dynamics, the government continues to monitor the movement of oil prices and global commodities,” said President Joko “Jokowi” Widodo at the House of Representatives complex in August 2019.
Meanwhile, the Energy and Mineral Resources Ministry expects the oil and gas industry to raise $127.3 billion in investments this year, which is lower than last year’s target of $159.8 billion and of which only 72 percent was realized.
In stimulating investment, Energy and Mineral Resources Minister Arifin Tasrif vowed his office “will no longer be a factory for rules but a facilitator of industry growth”.
This included building infrastructure, deregulating industries and improving electricity and natural resource supplies.
With such a bearish outlook, top-level stakeholders will pay more attention to the upstream industry, such as the Upstream Oil and Gas Special Regulatory Taskforce (SKK Migas), which expects 12 oil and gas projects to come onstream this year.
The largest among them is Italian Eni’s Merakes facility, which has an expected production capacity of 400 million standard cubic feet per day (mmscfd). The largest oil project is publicly listed Energi Mega Persada’s Malacca Strait Phase-1 facility with a production capacity of 3,000 bopd.
(source: The Jakarta Post)