Sunday, April 10, 2011

Oil Production Target will not be Met

The Coordinating Minister for the Economy, Hatta Rajasa, warned that this year oil production might not reach the target of 970.000 barrels per day.

That is why the government will keep on monitoring the performance of the upstream oil and gas regulator, BP Migas. “But we must assume the 970.000 barrels target will not be achieved,” he said.

Hatta said however, the shortage will not be much. “About 1000 to 2000 barrels per day is still fine,” he said.

Kurtubi, director of the Center For Petroleum and Energy Economic Studies, said that the target could be achieved if the government optimized its production in Cepu Bloc, East Java.

Speaking at the DPR, he said he was concerned that after years of exploitation, the Cepu Bloc still underperformed. “There seems to be mismanagement there,” he said.

In the last 10 years, no new oil fields have been discovered, whereas the potential fossil fuels potential in the country amounted to 84.4 billion barrels, comparable to conditions in the Gulf of Mexico and Central Asia. But in reality, only 4 billion barrels found of oil reserves have been discovered.

The problem is reportedly caused by the bad oil and gas sector investment climate. Investors avoid this sector because of legal uncertainty, complicated bureaucracy and corruption.

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