Tuesday, 9 July 2013

12 FOREIGN OIL EXPLORERS LOST RP19 TRILLION



Twelve foreign contractors of KKKS oil-gas suffered loss of as high as USD 1.9 billion or Rp19 trillion in 16 exploration blocks in deep sea as they failed to detect sufficient amount of oil and gas. All the losses suffered through 2009-2013 was borne by KKKS themselves and not compensated by the governments.
               
“It must be understood by the public that today to seek for new oil gas resources for the nation is getting harder and harder since the potentials are in the deep sea. Even after drillings are exercised into the deep sea, some foreign explorers who took the trouble of exploring failed to discover oil and gas reserves so they had to bear great losses as mentioned” Aussie B. Gautama, Deputy Chief of planning and control made the statement in Jakarta on Tuesday [11/6].
               
Oil gas explorations into the deep sea started in 2009 to 2013 by KKKS operators in 16 blocks. Drillings had been exercised in 25 exploration wells, draining expenses worth USD 1.9 billion but until today no sufficient oil reserve of commercial value had been detected.
               
Today Indonesia’s oil reserves was only around 3.6 billion barrels left which would dry out in a decade or two assuming that production was at today’s level and there was no production downturn and no new oil resource was found. To discover new oil resource would take enormous amount of capital and courage to take risk considering the depth where the resources were hidden.
               
“A number of KKKS operators planned to walk out of the operation zone and return the concession zone to the government of RI.” Gautama remarked.
               
He underscored that Indonesia had to be cautious about maintaining investment climate in the upstream oil gas industry considering that to discover new oil gas resources, KKKS operators of high capital was needed with courage to take risk. “Unless there were foreign KKKS operators who were in possession of big capital and courage to take risk, it would be hard to obtain new oil gas resources for continuity of production in the future.” Gautama said.
               
Beside a number of KKKS operators who planned to walk out. There were 2 blocks of sea exploration zones the operation of which had been transferred from KKKS Marathon Oil to KKKS Niko Resources, i.e. Block Kumawa and Block Bone Bay.
               
“The KKKS operators who are still active today are Niko Resources who operate 18 operation blocks and 3 partly non operator blocks. Niko Resources in 2013 to 2014 would still continue deep sea drilling in five operation zones, so Niko Resources was the only hope to pin on who can be expected to discover new oil resources in the deep sea” Gautama said.
               
Nico Resources was an operator in the exploration block who was very efficient in terms of financing: only Rp600, 000/blovk/year while expenses for drilling of deed sea wells at the depth of 20,000 feet only needed less than USD 90 million/well. (SS)  




Business News - June 14,2013

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