Parliament and Indonesia Government Agree on Gas Lifting Amounting 2013 2.260 Thousand BOEPD

Illustration: House of Representatives of the Republic of Indonesia (DPR RI) at Senayan, (Photo Doc/THNews)

JAKARTA (Telukharunews) - Meetings of the Commission VII of the House of Representatives with the Ministry of Energy, Monday (10/9) afternoon, agreeing lifting gas in 2013 amounted to 2.26 million draft budget BOEPD (barrels of oil equivalent per day), consisting of lifting 900,000 barrels of oil per day and lifting gas 1.36 million barrels of oil equivalent per day.

The meeting led by the Chairman of Commission VII Sutan Bhatoegana, also agreed to Indonesia Crude Price (ICP) U.S. $ 100 per barrel.

This is in accordance with the Financial Memorandum speech read by President Susilo Bambang Yudhoyono, August 16, 2012.

Minister Jero Wacik explained on that occasion, oil and gas production continued to decline since 1996, and is expected to reach its lowest point in 2012 and 2013. Increased production will start to happen in 2014, mainly from the Cepu Block. Gas production will also start to increase in 2013.

If combined, the oil and gas production in 2013 will reach 2.26 million barrels of oil equivalent per day in 2014 amounted to 2.393 million barrels of oil equivalent per day and 2.57 million barrels of oil equivalent in 2015.

While the Indonesian crude oil price projections (ICP) in 2013, based on world oil prices tended to increase in the first quarter of 2012, but it tends to fall at the beginning of the second quarter of 2012 as a result from the easing of tensions in the Middle East and the U.S. economic recovery. In the third quarter of 2012, world oil prices have increased again because of worsening geopolitical situation in the Middle East.

In addition, the oil price forecast in 2013 is also based on various sources of WTI, and Brent Reuters ranging from U.S. $ 65-140 per barrel.

"We calculated that if taking the number 100 as a basic assumption (oil prices) will be safe enough to face the world oil price shocks in the future. Course, we can not guarantee it will for sure (ICP) in the 100 because it concerns the world and us," he said .

However, he added, according to the Ministry of Energy, ICP of U.S. $ 100 per barrel, be accountable to the basic assumptions of 2013.

Parliament and Government also agreed on the volume of fuel and fuel subsidies amounted to 46.01 million KL, consisting of premium / bioethanol KL 29.20 million, 1.70 million KL of kerosene and diesel / biodiesel 15.11 million. 3 kg LPG agreed as 3.86 million tons.

As for biodiesel subsidies, agreed Rp 3,000 per liter. Bioethanol subsidies Rp 3,500 per liter.

LGV was agreed subsidy of Rp 1,500 per liter and Alpha fuel subsidy of Rp 642.64 per liter by ICP assumption of U.S. $ 100 per barrel and the exchange rate of Rp 9,300 per liter. (EMR)

BPMIGAS-Kangean Compensated Use The Forest

Jakarta (Telukharunews) - BPMIGAS with Kangean Energy Indonesia Ltd.., Agreed to do the replacement land compensation for the use of forest land for oil and gas upstream activities in operating Kangean, East Java (East Java). Deputy Chief BPMIGAS, J. Widjonarko symbolically give the official handover of land to the Director General of Forestry Planning, Ministry of Forestry, Bambang Soepijanto in Jakarta, Tuesday (11/9). Present at the occasion, Executive Vice President Kangean, Kumada Hitoshi and Head of Forestry, East Java, Gatot Subektiono.

Land area of ​​59 hectares located in the Village handed Throughout, District Sapeken, Sumenep, East Java. Compensation of land is one of the fulfillment of the obligation for license holders lend use forest areas to provide and give the land rather than the forest. With complete compensation for land, BPMIGAS will ask permission lend use forest areas for exploitation of oil and gas to the Minister of Forestry. "Hopefully license may be issued soon," said Widjonarko.

He explains, many oil and gas upstream activities are conducted in the forest area. BPMIGAS contracts and contractors are committed to obey and carry out all duties in accordance with applicable regulations. On the other hand, the acceleration of the licensing process is expected.

 "Characteristics of the upstream oil and gas industry are capital-intensive, technology, and high risk need legal certainty," he said.

Bambang appreciate BPMIGAS and Kangean step. According to him, these efforts demonstrate the seriousness BPMIGAS aturannyang obey applicable. He said he is committed to support the efforts being made to increase the production of oil and natural gas nationwide. In addition to energy needs, this sector has become one of the largest contributor to state revenues.

"We are open to feedback for improvement. Do not let the existing regulations discourage investment, "he said adding that the Ministry hopes that oil companies pay attention to the environment. (bpmigas)

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)