SKK Migas to Lower Gas Lifting Target due to Lack of Domestic Buyers

Anggita Rezki Amelia
22 Juni 2016, 08:56
Migas
Katadata

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) has claimed that securing buyers for natural gas in Indonesia is getting increasingly difficult. This is one of the reasons why the agency is likely to miss next year’s gas lifting target.

At a working meeting with the House’s Commission VII, the government through the Energy Ministry proposed setting the gas lifting target at 1,050 - 1,150 million barrel of oil equivalent per day (boepd) in the draft 2017 State Budget. This figure is lower than the 1,150 boepd gas lifting target in the Revised 2016 State Budget. (Read: Government Cuts Oil Lifting Target of Five Contractors)

SKK Migas Chief Amien Sunaryadi said that lifting has declined as sales have slumped. “For the most part, it’s due to difficult market conditions,” he said during a working meeting at the House’s Commission VII, Jakarta, Tuesday (21/6).

The Energy Ministry has predicted that not all LNG will be sold this year. There are 10.4 gas cargoes from the Bontang Refinery that will remain unsold.

The 2016 LNG Balance published by the Energy Ministry predicts that the Bontang Refinery will produce 152 LNG cargoes this year, of which 90.60 cargoes have already been contracted for export, and 17 cargoes have also been contracted for the domestic market.

Of the remaining cargoes, 14.5 will be sold to domestic market, 20 will be exported and 10.4 have yet to find a buyer (Read: Pertamina to Import LNG to Anticipate Deficit)

Member of Commission VII Inas Nasrullah Zubir opposed to the government’s plan to reduce the gas lifting target in the 2017 State Budget. He argued that there is no gas deficit. He said that gas is readily available; all the government needs to do is to find a market for it. "I don’t agree that the lifting (target) should be lowered because of market problems," he said.

The government has set oil lifting target in the 2017 State Budget at 740,000-760,000 barrels per day (bpd), which is lower than the 830,000 bpd target set in the draft Revised 2016 State Budget. 

Member of Commission VII Kurtubi rejected the proposed target because it is the lowest in 50 years. He does not want next year’s oil lifting target to be much lower than this year’s. "Please don’t (reduce it to) 740,000 bpd. Make it at least 800,000 bpd, to give SKK Migas something to work with," he said.

Meanwhile, Director General of Oil and Gas I.G.N Wiratmaja Puja said that several matters needed to be taken into consideration to increase oil and gas lifting. For example, careful calculations need to be made to boost the Cepu Block’s production. "We have to evaluate this," he said. (Read: ExxonMobil Cancels Plan to Boost Cepu Block’s Production to 200 Thousand Barrels)

Actual gas lifting from January to the end of May was 1,186 boepd, and oil lifting during the same period was 808,000 bpd.

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