External factors Dominance Constraints Oil and Gas Exploration

Photo illustration of one of the locations of oil wells in the working area of Pertamina EP Pangkalansusu (Photo THNews)

JAKARTA - External factors such as licensing, overlapping land, compensation and other social issues found to be the most dominant constraint in the implementation of the exploration of oil and gas upstream. This is evident from the results of the evaluation conducted by the Executive Agency for Upstream Oil and Gas (BP Migas) to the Production Sharing Contract (PSC Contractor) exploration exploration certainly has not fulfilled commitments.

Of the total of 121 contractors KKS exploration period exceeds 3 years, there were 69 contractors who do not meet the KKS definite commitment. "Based on the mapping done by BPMIGAS, the external factors remain major obstacles experienced by 69 contractors working area exploration," said Deputy Chief J. BPMIGAS Widjonarko when opening Farm In-Out Forum 2012 in Bali, Friday (7/9).

Constraints such as licensing, overlapping, and others, occurred in at least 33 percent of 69 exploration contractors who do not meet exploration commitments. At the same time, these contractors also face more than one obstacle.

To help overcome these constraints PSC exploration, plainly year BPMIGAS form PSC Operator Work Area Forum Operations (FOKWE). Licensing and Social Committee, which is one FOKWE committee has made several attempts to overcome these obstacles, among others, in the administration of strategizing and organizing extent permitted sharing session on security and social issues involving multiple contractors KKS considered successfully address issues related to these issues. Containers discussion is expected to provide inspiration for other KKS Contractor experienced the same problems.

Risk Sharing

In addition to external constraints, the second highest constraint is internal constraints KKS Contractor itself, such financial problems and the operatorship. Constraints occurred in 24 percent of 69 exploration contractors who do not meet definite commitment exploration.

Internal constraints are related to the nature of the upstream oil and gas industry is a capital intensive industry and high risk. Therefore some PSC has the intention to offer its shares to the other party to share the risk.

Widjonarko said the existing provisions, both in government regulations or in contracts, KKS Contractor has the right to share the risk with others. "However, based on the rules, during the first 3 years PSC should not be transferred operatorship and remain a major interest holder," said Widjonarko. He added, BPMIGAS support KKS Contractor during the risk-sharing rules.

In order to facilitate the PSC to share the risk of holding Farmout BPMIGAS Forum 2012 which is one of the strategic programs FOKWE. This forum is a forum to bring together the PSC Contractor will perform farm out the PSC Contractor or prospective investors who are interested in farm. A total of 22 contractors who are looking for investors to open a booth to present its jurisdiction in this forum.

Widjonarko affirming all efforts to expedite exploration activities to be supported as the fulfillment of exploration commitments will ultimately increase national oil and gas reserves and production. (EMR)