Indonesia’s crude output misses 2010 target

JAKARTA, Nov 3 (BestGrowthStock) – Indonesia’s crude oil production
missed its 2010 budget target after a gas pipeline leakage last
month hit production at Chevron Corp’s (CVX.N: ) unit, a
government minister said on Wednesday.

Indonesian Coordinating Minister for the Economy Hatta
Rajasa told reporters oil lifting would fall short of the
target of 965,000 barrels per day because of the PT
Transportasi Gas Indonesia (TGI) pipe leak, which affected
production and cut output from the Minas and Duri fields of
Indonesia’s biggest oil producer, PT Chevron Pasific Indonesia
(CPI).

“Oil lifting has had difficulties reaching our target of
965,000 barrels per day,” he said.

“This is the impact from the disturbance to TGI’s Chevron
gas pipe. Currently, predicted oil lifting is 960,000 barrels
of oil per day, with a revenue loss of nearly 500 million
rupiah.”

An official at the mines and energy ministry had already
predicted this year that Indonesia would fail to meet the
budget target for crude and condensate production, but said the
impact on the country’s budget position would be small.

Rajasa said the government was looking for the solution to
a debate over the country’s cabotage code in order to reach
2011’s oil lifting target of 970,000 bpd.

Indonesia’s rigid implementation of cabotage has deterred
deep sea exploration as the code considers rigs as foreign
shipyards. Rajasa said the government was considering revising
the code.

Indonesia has struggled to attract fresh investment to
develop new fields, partly due to an uncertain regulatory
environment.

The country has offered new exploration rights and has said
it will offer new incentives to oil and gas investors,
including more favourable tax treatment and production splits.

But industry players say the incentives are not enough.
Major global oil contractors working in Indonesia include Exxon
Mobil (XOM.N: ), Chevron (CVX.N: ), ConocoPhillips (COP.N: ), and
France’s Total (TOTF.PA: ).
(Reporting by Rieka Rahadiana, Writing by Chandni Vatvani,
Editing by Andrew Marshall)

Indonesia’s crude output misses 2010 target