Indonesia’s upstream industry is poised to grow strongly in 2024 and beyond as the government has offered number of blocks for exploration and production.That’s what analysts at BMI, a unit of Fitch Solutions, said in a report sent to Rigzone by Fitch Group recently, adding that “there are a number of key gas projects in the pipeline that are planned to be developed along with foreign companies”.“Upstream exploration activities are expected to accelerate since the government has awarded new oil and gas blocks to local and foreign companies in 2023,” the analysts added.
BMI forecasts that Indonesia’s crude, NGPL, and other liquids production will come in at 832,900 barrels per day this year, 840,500 barrels per day in 2025, 851,500 barrels per day in 2026, 882,300 barrels per day in 2027, and 883,900 barrels per day in 2028, the report showed.The company estimated in the report that the country’s crude, NGPL, and other liquids production averaged 822,400 barrels per day last year and 818,100 barrels per day in 2022.
BMI also projected in the report that Indonesia’s dry natural gas production will hit 61.5 billion cubic meters in 2024, 62.7 billion cubic meters in 2025, 64.0 billion cubic meters in 2026, 67.2 billion cubic meters in 2027, and 69.9 billion cubic meters in in 2028.The company estimates that Indonesia’s dry natural gas output averaged 60.3 billion cubic meters in 2023 and 57.4 billion cubic meters in 2022, the report highlighted.
“Indonesia’s upstream remains a bright spot for foreign investment as the government seeks to rise long-term oil and gas production targets,” the BMI analysts stated in the report.“Exploration activities are expected to gather momentum in [the] medium term since the upstream regulator SKK Migas had awarded blocks for exploration to both local and foreign companies,” they added.
Total investments for the upstream sector in the first quarter of 2024 stood at $4.7 billion, the analysts noted in the report, highlighting that this is a two percent year on year increase from the same period in 2023. The analysts said investments are expected to rise further in 2024 as foreign companies are preparing to begin explorations in oil and gas blocks awarded in 2023.
“The international and regional oil companies including Eni, ExxonMobil, Mubadala, and Petronas are reinforcing their commitments to investments in Indonesia’s upstream sector as the government continues to improve PSC terms to attract investments,” BMI analysts stated in the report.“Capital expenditures by the international and national oil companies are expected to rise in 2024 and beyond since they had discovered new oil and gas reserves in 2023,” they added.
Oil, Gas Output
In the report, the BMI analysts noted that the outlook for crude oil and condensate production from associated gas projects “remain[s] positive since … upstream investors are planning to develop newly discovered gas fields”. They added, however, that Indonesia will continue to face challenges to meet a crude oil production target of one million barrels per day in 2030 since no significant oil discovery has been made so far.“Pertamina and private oil producers will need to rely on development projects that are intended to raise production from maturing oil fields,” they said in the report.
“Investments in upstream oil projects are rising, but the prospects for crude oil production growth depends to a large extent on the success of explorations,” they added.“The government appears to be making a strong policy push to boost crude oil production to accommodate anticipated demand growth from refining industry and to reduce dependence on imports as well as maintain crude oil exports,” they continued.
The analysts stated in the report that the discovery of gas fields in 2023 raises the outlook for Indonesia’s natural gas production but warned that there will be some delays on the supply side because some key projects have not been sanctioned for development by the operators or the government.“The development of long-delayed gas projects, the Indonesia Deepwater Development (IDD) and Masela gas block and Tuna gas fields, raises the long-term outlook for gas supply,” the analysts said.
“Exploration successes are reinforcing Indonesia’s objective to reach gas production targets of 12 billion cubic feet per day by 2030,” they added.“Pertamina is expected to maintain higher level of capital expenditures to expedite exploration and boost domestic gas production as part of the government’s long-term energy policy,” they went on to state.
EI Figures
According to the Energy Institute’s (EI) latest statistical review of world energy, which was released last year, Indonesia’s oil production came in at 644,000 barrels per day in 2022. That figure marked a 6.9 percent year on year drop and 0.7 percent of global oil production that year, the review showed.
EI’s oil production figures include crude oil, shale oil, oil sands, condensates (lease condensate or gas condensates that require further refining) and NGLs (natural gas liquids – ethane, LPG and naphtha separated from the production of natural gas), the review highlighted. The figures exclude liquid fuels from other sources such as biofuels and synthetic derivatives of coal and natural gas, liquid fuel adjustment factors such as refinery processing gain, and oil shales/kerogen extracted in solid form, the review pointed out.
EI’s review showed that Indonesia’s natural gas production was 57.7 billion cubic meters in 2022. That figure marked a 2.7 percent year on year decrease and 1.4 percent of global natural gas output that year, according to the review.The review’s natural gas output figures exclude gas flared or recycled and include natural gas produced for Gas-to-Liquids transformation, the review revealed.
Source:https://www.rigzone.com