0 Rudi Takes Helm at SKMigas With Plans

Temporary oil and gas regulator SKMigas has approved two plans of developments so far this year that will yield $2.32 billion in revenue for the state, according to Rudi Rubiandini, the newly appointed chief of the industry watchdog. The plans will involve a combined investment of $1.8 billion. “Two weeks on the job, and I have already signed two PODs,” he told journalists in Jakarta on Friday. The projects involved are at the Jangkrik North East field in East Kalimantan, and at the MBH-MBD field in Madura, East Java. 

PODs refer to advanced plans to produce oil and gas from the fields. The Jangkrik field is operated by Italian firm ENI, which holds a 55 percent stake, with the balance held by France-based GDF Suez. Rudi said the investment value of the Jangkrik field development is around $1.4 billion, with the government getting $1.14 billion in revenue. “The field will go on stream in 2015, and will reach plateau in 2016 with production at 145.5 million metric standard cubic feet per day [mmscfd],” Rudi said, adding that the field contains 400 billion cubic feet of natural gas that can be extracted. 

Rudi, the former deputy energy and mineral resources minister, also revealed that the regulator had increased the domestic allocation from the Jangkrik field to 40 percent, from 25 percent. He added that the average price of the natural gas had thus increased to $9 per million British thermal unit (Btu), from $7 per million Btu, as a consequence. It is estimated that the field holds 300 billion cubic feet in natural gas reserves. He said that the field will go on stream in 2016 and is expected to reach its plateau in 2017, with production at 120 mmscfd over the course of five years. 

“All of the gas production is for domestic purposes,” Rudi said. Canadian-based Husky Energy is the operator of the field, while Chinese state-owned oil firm Cnooc is a partner. According to the regulator’s estimate, the oil and gas industry will generate up to $29.9 billion in revenue for the state this year, lower than the budget assumption of $31.7 billion, as production will fall short of the government’s target. Some 47 PODs were approved last year, with the government expecting to secure $18.9 billion in revenue.

source : the jakarta globe