Rig dearth aggravates Indonesia’s declining oil and gas production
JAKARTA: Pertamina EP, the exploration and production arm of state-owned oil and gas company Pertamina, blamed a dearth of oil rigs for hampering efforts to achieve the one million barrels of oil per day (bopd) target.

Bayu Kusuma Tri Aryanto, the company’s Region 2 vice-president for supply chain management, said on Monday that many jackup rigs were being used abroad, limiting the number of rigs readily available for oil companies with operations in Indonesia.

“The challenge we are facing is the dearth of rigs. They’re now being pulled out of Indonesia,” Bayu said in Jakarta, as reported by Kompas.

He suggested that stakeholders put more effort into ensuring the availability of rigs in the country by establishing a farm-in rig procurement contract.

The farm-in scheme enables contractors to arrange the use of a single rig between operators under one agreement, which may make it possible for them to keep their operations going in times when rigs are difficult to secure.

Bayu noted the importance of cooperation between the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) and the contractors in keeping existing rigs within the country.

Moshe Rizal, who heads the investment committee of the Association of Oil and Gas Companies, said the limited number of rigs was one of many factors behind Indonesia’s steadily declining oil production.

“Bayu was probably referring to work-overs. For example, PT Pertamina Hulu Rokan is carrying out a lot of work-overs and drilling new wells.

“However, these will only put the brakes on Indonesia’s declining production, not ramp it up,” he told The Jakarta Post on Tuesday. “Increasing enhanced oil recovery and exploration are the ways to boost production.”

Moshe went on to suggest that SKK Migas establish a database to record national rig usage to effectively ensure rig availability and optimise rig utilisation.

Oil consumption in South-East Asia’s largest economy is forecast to more than double to 3.97 million bopd by 2050, according to SKK Migas data, while natural gas consumption is expected to more than quadruple to 26,000 million standard cubic feet per day.

Indonesia’s oil industry hit its peak in the 1970s and 1980s, when oil production exceeded one million bopd and oil exports drove economic growth.

But production has steadily declined, mostly because of aging wells and a lack of new discoveries.

Conduction was last recorded at 606,700 bopd in 2023, according to SKK Migas data.

The country is expected to see its production decline to 300,000 bopd in 2030 and 119,000 bopd in 2040, which will be the equivalent of respective drops of 58% and 87% from 2020 levels. — The Jakarta Post/ANN
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Pertamina EP, the exploration and production arm of state-owned oil and gas company Pertamina, blamed a dearth of oil rigs for hampering efforts to achieve the one million barrels of oil per day (bopd) target.