Indonesia facing production dip

Feb. 20, 2020
Indonesia’s oil and gas production look set to fall this year, according to Rystad Energy.

Offshore staff

OSLO, NorwayIndonesia’s oil and gas production look set to fall this year, according to Rystad Energy.

Although the country’s upstream task force SKK Migas has set a target of 755,000 b/d for 2020, Rystad is forecasting 718,000 b/d, with production from mature assets dropping by around 38,000 b/d.

At the same time, assets in the ramp-up phase will only add 10,000 b/d, suggesting a shortfall of 37,000 b/d compared to SKK Migas’ target.

Senior upstream analyst Prateek Pandey said: “Out of the eight fields starting up in 2020, only Malacca Strait Phase 1 is an oil play and will not on its own replace the declining production from Indonesia’s mature fields.

“Because of this and the delays to projects that were set to start producing in 2019, even maintaining 2019 levels of oil production might be difficult…”

For gas, SKK Migas is targeting a 12.4% rise in production to 6,670 MMcf/d in 2020. Rystad, however, expects a decline from 5,934 MMcf/d last year to 5,870 MMcf/d.

Pressure is growing on state-owned Pertamina as the offshore Mahakam and onshore Rokan fields have both undergone higher decline rates since they were assigned to the company in 2018, the analyst said.

Although start-up of the Eni-operated Merakes offshore field will boost the country’s gas output, the real impact of this field will not be felt until at least 2021. And with no major oil projects on the horizon, oil production looks set to continue falling until Pertamina steps up drilling on the Rokan block, formerly operated by Chevron.

“It is imperative for Indonesia’s oil and gas production that Pertamina reduces sanctioning hurdles that have long delayed many of its projects and implements advanced enhanced oil recovery technology on its mature fields,” Pandey said.