Oil and Gas Investment in Indonesia is Still Attractive

KATADATA ? Investors are still eager to invest in oil and gas industry in Indonesia. One of them is Ophir Energy that plans to acquire four blocks belonged to Niko Resources.

Head of Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Amien Sunaryadi said that these four blocks are located in deep waters and still in the exploration stage. ?This proves that the investment climate in Indonesia?s upstream oil and gas industry is still attractive,? he said in Jakarta.

In addition, Ophir also plans to acquire Salamander Energy. The latter owns Bangkanai Block, North East Bangkanai Block, West Bangkanai Block, and South East Sangatta Block in Indonesia.

?The price become cheaper amid global oil price drop. They expect the oil prices to go up when (these blocks) went on stream,? said Amien.

Nevertheless, the decline in oil prices has implications on producing oil and gas blocks.  A number of PSC (Production Sharing Contract) contractors have cut back on their activities.

In fact, some of them have to revise their work plans and budgets which resulted in the decline in the upstream oil and gas investment this year by US$3.4 billion or around IDR44 trillion.

?Of course they are allowed to make revision, most of them are reducing their activities. They try their best to maintain production-related activities to avoid a sharp drop in production this year,? he said.

PT Pertamina Hulu Energi West Madura Offshore (PHE WMO) has slashed its investment too. The subsidiary of Pertamina has postponed the planned drilling of six new oil and gas wells in Bangkalan Regency, Madura due to the decline in oil prices.

President of PHE WMO Boyke Pardede said that his company will only drill one new well this year and will work on the remaining wells next year until 2017.

?We will add another exploration well (this year) so that we will work on seven exploration wells next year,? said Boyke Wednesday at (7/8) Gran Mahakam Hotel, Jakarta.