Indonesia Prepares Scenarios to Boost Production

Indonesia's government has prepared three scenarios to raise the national oil and gas production and reach the target to increase it 30 percent by 2009, Oil and Gas Director General Luluk Sumiarso said.

The scenarios made by the government combine pessimistic and optimistic targets in oil and gas output. The low-end scenario in increasing oil and gas production by 2009 comprises of 1.070 million barrels a day for oil, or a 5% increase, and 1.886 million barrels of oil equivalent a day for gas, a raise by 29%. This brings a total of 2.956 million boepd, or an increase by 20%. The high-end scenario is an increase of 38% in total to 3.415 million boepd, comprising of a raise in oil output to 1.35 million bpd and 41% in gas to 2.065 million boepd.

The combining scenarios are: the first, oil at 1.070 million bpd (a 5 percent increase from now) and gas at 2.06 million boepd (41%), or a total of 3.135 million boepd (26%); the second is oil at 1.35 million bpd (32%) and gas at 1.886 million boepd, or a total of 3.236 million boepd (30%); the third is oil at 1.326 million bpd and gas at 1.903 million boepd, or a total of 3.229 million boepd (30%).

BP Migas Chairman Kardaya Warnika said that the petroleum output increase will be gained from 33 areas whose plans of development have been approved. "We will also slow down the decline rate," he said.

Luluk added that the government will try to solve the obstacles met in increasing production, such as the disincentives in taxes and import duties, including exploration VAT, the use of protected forests, and pressure from local governments, which want to take part in drilling for oil and gas.