JAKARTA, Sept 20 (Reuters) - Indonesia can raise crude oil production to 1 million barrels per day (bpd) from the current government target of 945,000 bpd, if it improves investment incentives, ConocoPhillips said on Tuesday.
The country is lagging in its goal, producing 922,000 bpd this month, but is aiming for 950,000 bpd next year, with Chevron Corp remaining the top producer with a target of 357,000 bpd, while ConocoPhilips is expected to produce 57,000 bpd.
Thailand has a more competitive fiscal policy compared with Indonesia, Jim Taylor, President of U.S. oil company ConocoPhillips and chairman of the Indonesian Petroleum Association (IPA), told an energy conference.
“Indonesia can reach 1 million in oil lifting given the investment climate is helping. Oil is declining but gas is increasing. They are waiting for successful exploration in oil,” he said.
Taylor said to achieve the goal, Indonesia needs to triple its investments in the oil and gas sector and explore enhance oil recovery (EOR) technology for deep-water drilling.
Declining output at ageing fields and sudden shutdowns in oil wells have often derailed Indonesia’s plans to meet annual targets, which have fallen from its peak in 1995 of 1.6 million bpd, after Chevron Pacific Indonesia implemented EOR technology in its Sumatran fields.
BPMigas said in June that oil and gas contractors need to use EOR technology to boost the country’s oil reserves by 10 percent, or an extra 4.3 billion barrels to its existing proven reserves of 3.7 billion barrels.
Chief Economic Minister Hatta Rajasa told the conference that Indonesia’s oil and gas production is now around 2.5 million barrels of oil equivalent per day (boed) and aims to raise it to 4.0 million boed by 2015 and 6.0 million boed by 2020.
To do that, the government will look into the pace of approving energy exploration applications and remove red tape. “The government is prepared to debate all the issues, including its pricing policy,” he said.
Domestic media has reported that Indonesia is putting pressure on companies holding oil and gas contracts to expedite their projects and will call up 149 contractors to discuss why they have failed to meet exploration commitments.
”Previously, we were too lax in allowing contractors to delay their exploration projects. We’ll never do that again,“ Hardiono, deputy head of state energy watchdog BPMigas was quoted as saying. ”If in six years the exploration commitments are not accomplished, we’ll terminate their licenses.