Indonesia Has High Oil Depletion Rate

abarrelfullabarrelfull wrote on 28 Mar 2012 12:57
Tags: asia indonesia upstream

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Indonesia apparently has high depletion rate of its oil reserves — eight times higher than the world’s main oil-producing countries like Saudia Arabia and Libya.
Indonesia’s Upstream Oil and Gas Executive Agency (BPMIGAS) revealed the fact on Saturday (3/3) during an event held by the Indonesian Association of Geology Students (Perhimagi) at the Diponegoro University in Semarang.

According to BPMIGAS Head of Public Relations, Security and Formality Division, Gde Pradnyana, Indonesia only has around 4 billion barrels of oil reserves, and produces an average of 1 million barrels of oil per day. This means that the country’s reserve to production ratio stands only at 4 — far from those of Saudi Arabia and Libya. As a comparison, Saudia Arabia has 265 billion barrels of oil reserves and produces 8 million of barrels per day in average. This makes Saudi Arabia’s reserve to production ratio stand at 35. Libya, on the other hand, has 46 billion barrels of oil reserves and produces an average of 1.5 million barrels per day, making its reserve to production ratio reach 30.
“This means that we have depleted our oil reserves at a rate that is eight times faster than Saudi Arabia and Libya. In other words, our oil reserves have been used up eight times faster than the two countries. Our oil depletion rate, thus, can be considered very high to be compared with other oil-producing countries,” Gde said.

The discoveries of oil reserves with high amounts have been taken place in west Indonesia — like in the Minas, Duri and Cepu fields. The depletion activity in the Minas Field started in the 1950s and reached its peak in between 1975 and 1976, producing around 250,000 barrels of oil per day. This had made it the biggest contributor to total national production amounting to 1.5 million barrels per day. Since then, however, the field’s production rate has continued to decline, with its current production has been only around 70,000 barrels per day. The declining production rate at the Minas Field, was compensated by the depletion activity at the Duri Field that began in the 1980s. At that time, the field was able to produce around 400,000 barrels per day, and this had contributed to the country’s peak oil production in between 1995 and 1996 that reached 1.6 million barrels per day.

Similarly, the Duri field’s production rate has continued to decline, following its reserve that has been running low. Currently, both the Minas and Duri fields are only able to make a total output of 360,000 barrels per day.

Other discoveries, unfortunately, had been found to have smaller reserves than the previously mentioned fields. Moreover, explorations that are currently carried out in east Indonesia have discovered gas reserves with high amounts, instead of oil. This includes projects like Tangguh, Makassar Strait’s Deepwater Area (including Gandang, Gendalo and Gehem fields), Masela (Timor Sea) and the latest one, Genting Oil, in Bintuni.

From these two facts, it could be concluded that our national reserves have continued to shrink in the past ten years — from 4.3 billion barrels to 3.9 billion barrels. Our national gas reserves, on the other hand, have stood high — at more than 104 trillion cubic feet.
“The upstream oil and gas industry is an exploration and exploitation industry of oil and gas reserves. The Nature cannot be forced to produce oil or gas, but we can find the locations of the reserves and exploit them with all methods available,” Gde said.

He also revealed that with the current national fuel consumption or demand that reaches more than 1.2 million barrels per day, while the domestic refinery capacity stands only at 700,000 barrels per day, we cannot avoid fuel imports to meet the demand.
“This is something we cannot avoid. Even if our national crude oil production reaches 1.6 million barrels per day, fuel imports will still be unavoidable,” Gde said.

Considering the facts that Indonesia greatly needs energy to support its local economy, and that oil has become more difficult to find and to be produced — as more gas have been discovered, it should be noted that problems concerning fuel subsidy and fuel prices increase are realities that have to be dealt wisely by all parties. (ALF)

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