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BPMigas Bets Chevron Can Pump More Oil
Ririn Radiawati Kusuma | January 15, 2012

A worker looks on an oil rig offshore in Wet Madura Offshore Block, East Java. Upstream oil and gas regulator BPMigas is confident that Chevron Pacific Indonesia can surpass this year’s production forecast of 330,000 barrels per day and hit 350,000 bpd on intensified efforts to increase output. (Antara Photo/Ismar Patrizki) A worker looks on an oil rig offshore in Wet Madura Offshore Block, East Java. Upstream oil and gas regulator BPMigas is confident that Chevron Pacific Indonesia can surpass this year’s production forecast of 330,000 barrels per day and hit 350,000 bpd on intensified efforts to increase output. (Antara Photo/Ismar Patrizki)
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Indonesia’s upstream oil and gas regulator is confident that Chevron Pacific Indonesia can surpass this year’s production forecast of 330,000 barrels per day and hit 350,000 bpd on intensified efforts to increase output.

Lambok Hutauruk, deputy of evaluation and legal affairs at BPMigas, said Chevron Pacific Indonesia, the local unit of US energy giant Chevron, planned to drill 380 new oil wells in the country to add 11,200 barrels per day of oil production.

He said it would also rework 211 of its existing wells to boost production by another 4,200 bpd.

It is important the projects go smoothly, he said, because CPI, the largest producer in the country, is “the backbone” of the nation’s overall production, accounting for 40 percent.

“If Chevron coughs, even a little, it will hurt national production,” Lambok said on Saturday.

He pointed to an incident last November when a gas pipeline transferring fuel to CPI in Duri, Riau, sprang a leak that led to a five-day shutdown and cost the company 500,000 barrels of oil.

CPI, which draws most of its production from the Rokan and Siak blocks in Sumatra, saw its average oil pumping rate in 2011 decline by around 5,000 bpd to 357,000 due to natural decline. This year it has set a lower production target of 330,000.

Harris Djauhari, a senior CPI official, said drilling new wells was vital to the company’s plans for boosting production this year.

However, he said the company was concerned about possible land acquisition problems and resistance from the local community, which he called “external, non-technical problems.”

New oil wells could require buying land from residents, something that frequently holds up business projects here.

BPMigas has reprimanded Pertamina, the state oil and gas producer, and the local wing of French oil company Total for falling short of their 2011 production targets.

Total was supposed to produce 92,000 bpd of oil last year but fell short by 9,768 bpd, said Rudi Rubiandini, a BPMigas deputy for operations. At the same time Pertamina had set out to produce 132,000 bpd, but actual output was 123,600 bpd, he said.

BPMigas has forecast Indonesia’s oil production to reach 930,000 bpd this year. The government set a target of 950,000 bpd in the state budget.

Indonesia’s oil production reached 903,400 bpd last year, far below the 945,000 bpd set in the state budget, Rudi said.

Indonesia has tried to boost oil production to one million bpd per day since it left the Organization of the Petroleum Exporting Countries in 2008, after it became a net importer.

Oil production hit a peak of 1.6 million bpd in 1995 as Indonesia benefited from the so-called oil bonanza era.

Reserves at many Indonesian oil fields are declining and aging equipment has made operations less efficient.