Tuesday, May 6, 2008
Wedged in Two Difficult Options
”I want make oil production be increase and more maximise for state finance acceptance by efficiency cost recovery. That my target,” Priyono promised after he has been inaugurated became the Chairman of Upstream Oil and Gas Regulator (BPMigas) by Purnomo Yusgiantoro, The Minister of Energy and Mineral for 2008-2012 period. Priyono replaced Kardaya Warnika several last day.
BPMigas have bad track record pressed cost recovery or cost operational for oil and gas exploration so made charged financial state. Year to year, cost recovery always increased. Last year, to all Contractor Production Sharing (CPS) cost recovery reached US$8.33 milliards (Rp77.4 trillion).
Consist US$4,802 milliards (Rp44,6 trillion) for produced oil and gas until US$3.535 (Rp 32.8 trillion) for produced gas, more higher than 2006 reached US$7.8 milliards or Rp 72.5 trillion.
Ironically, even cost recovery increased, BPMigas can't reached lifting's target oil in APBN. Lifting oil target 927.000 barrel per day at APBN 2008 is bottommost target which should be reach by BPMigas and all contractors.
That problem must be challenge and should answer by Priyono. Evenless, according to Kardaya Warnika, the former Chairman of BPMigas, expensive oil price now can push world oil companies more agressive to found oil equipment and others resources oil and gas. Expensive oil price also made intensive activity oil and gas companies upstream worldwide.
He said, this situation pushed competition looking for goods and service for stationary operate for oil operational such as drill rig, steel, ship, crane barge, etc so oil price worked up drastically. Up to last three years ago, offshore drilling tool rent expenses increases about 300% and steel price increased until 50%.
"Now, we can’t easy to found rig. We must looking for bound fast distress. If we want to make ship, we can’t contract with shipyard, they can't now.”
In this condition, Kardaya estimate, cost recovery operating will be more higher than last years. According to BPMigas, cost recovery be increase because Indonesian oil production fields majority are old fields and already operating since 50 last year.
More oldier a field can more down production and make expensive operational cost.
Productions decreased old field at Indonesian average 10%. The effort just bate production decrease speed. Developed field lately a considerable part are field that have cost's little unit reserve development high.
"Cost operating be increas, drill rig rent reaches about 300%. Ask to Medco. And then, energies, oils, geology, driller, teenagers difficult founded now. Its rise are kinds, so if offshore's drill rig gets on 300 percents. If twofold rise ship, rising pipe 50 percents," said Kardaya.
Pertamina includes as one contractor also input cost recovery's ascension contribution about 24%, causes oil production cost per barrel Pertamina E&P more bigger that others contractor.
Priyono also claims, is not easy to reach lifting targets because oil price now more expensive until near US$120 per barrel, that ensured will push to increase operating cost. ”It really corelative. Will be rise (cost recovery if oil price also rise, red),” he said.
In consequence, Priyono said, we must proportional to see about cost recovery among production attainment. “Its mean, don't cost worked up, but revenue also down,” said Priyono. According to her, to control cost recovery, BPMigas will ensure all finances program explores more structure with every consideration.
“So following via PoD (Plan of Development) must can explain financial structure. PoD is basis, that becomes and will be apply. So, that is a form of control cost recovery,” clear Priyono.
Alternative
To press cost recovery, Kardaya said, there are two intermediate alternative was discussed, namely gets PoD's basis and network (grid ). While via counter PoD's basis, therefore collaboration contract with contractor can't insert cost recovery outside PoD pertinent. But, he add, the scheme PoD's basis can alarm to constrain government effort hasten oil and gas production.
While network basis alternative, therefore in one block will be divided as some part or box. System grid in line with government effort hasten production ascension and was utilized at
The news cost recovery count system, Kardaya said, will be apply on new oil and gas contract and prolongation. But, the contract already walks still following old contract system.
Kurtubi, oil and gas observer reminds, that BP Migas must unagreeable exploration drilling at territorial job/block. Evenless, the exploration drilling realization at territorial new all but signer despite naught obstructs increasingly.
Kurtubi questioned about return problem (relinquishment) job region/block already gets production as ruled as deep production sharing contract (PSC). In PSC, contractor getting constant gains control 20 percents at job region/blocks originally until contracts edd up to 20-30 years.
According to her, region effects lossy jeopardy drilling, its exploration can charge upon state. "Rule 20% in PSC Indonesian that goes against PSC'S basic principle, whereabouts exploration jeopardy necessarily becomes investor charges," he said.
Kurtubi also assess, cost recovery's system now Authorization For Expenditure/AFE's distension gristle (budget) so needs benchmark's and transparency.
He also questioned about continue audit result of The Financial Examiner Body (BPK) concerning with net-operating cost purpose explores. "If follow up, will give economize for APBN very much. has founded potency US$2,5 milliards. That can be backed to APBN, can be help. So, no need oil and gas price accession, but that must do," he allegedly.
Observer oil from The Institute of Technology Bandung (ITB) Andang Bachtiar assesses, cost recovery can be pressed as useful as possible with streamline BP Migas job.
He assesses, performance BP Migas uneffective.
"Expecialy, in term observation cost recovery, and then under-production efficient and effective because person amount that handles contract control for region already gets production reducing are unefective," he allegedly.
Purnomo hope BP Migas make shortly and restructuring to give fresh officials to get new position in BPMigas so can more maximize perform role and function.
According to Purnomo, BPMigas will change officials at BPMigas. He said, BPMigas need new faces be leader organization so can make organization more dynamics. Purnomo also bargains for Priyono to groove bureaucracy that lifts the weight Product Sharing contractor.
Purnomo want BPMigas made shortly bureaucracy so can give good service. “I get entry, all bureaucracy this time so slowly. BPMigas staff and employee stills to rule as slowgoing bureaucrat, I don't want hearing again," Purnomo explicit.
He suggests that BPMigas made interlaces harmonious relationship with all stakeholder oil and gas as CPS, and the others network government in Departement of Energy and Mining.
Priyono declares, he will change structure at BPMigas. ”I have passed on haven't such a bureaucracy era. But, that autority’s task department to arrange structure.”
Priyono also will increase national petroleum production oil until one million barrel per day and up gas production until 10 million cubic foots per day.
He will also create perform guidance framework contracts upstream business activity collaboration oil and gas who give legal certainty and good investment climate and transparent, and gives professional service to all contractor. Priyono also already back up increase oil and gas national capacity.
The target lifting oil until 927 thousand barrel per day in APBN 2008 must be reach, so believed can help APBN from charges oil price pressure that until through level US$120 per barrel.
BPMigas and all contractor contracts collaboration oil has blackjack sweat lifting target appropriate oil. If fail, can make APBNP become deficit.
"If since for one years decreased production average 10 thousand barrel per day, APBNP be reach about Rp2 trillion," said Anggito Abimanyu, The Head Warms Up Treasury Department Fiscal Policy at Jakarta several last day.
"We ask BP Migas Chairman can increase production and presses cost recovery," explicit The chairman Commission VII DPR Airlangga Hartarto.
Intensive Control
Purnomo also forced BP Migas and all contractor will performance clamp down in to incrase production. According to Director General Oil and Gas ESDM Luluk Sumiarso, government will continually monitor contractor performance utilised ensure lifting's target attainment.
"We will entry and verification. We are serious, cross a cheque and sweeping, that target can be reached," he said. Government will always update direct reporting from contractor.
"If there are things which still need improve, we have extant corrective action . Extant our time," he allegedly after shuts close with to amount contractor such as Chevron, Total, Pertamina, ConocoPhillips, PetroChina, ExxonMobil, etc.
But, Luluk can't ensure if target can be reach forwards year around. Because from contractor report, Luluk said, there is contractor can production under target, hut the others can get above target.
But, Kardaya Warnika gives signal if oil production target contractor earlier passed on BPMigas in schedule proposes to increase production until 1.043 million barrel per day on 2008 difficult attained.
According to her, to account lifting oil not same economic theory. On January 2008, BP Migas notes, averagely oil production only reached 955.840 barrel per day, 986.840 barrel per day on February, 985.870 barrel per day on March, and 981.88 barrel per day on April.
Dodi Hidayat, BP Migas's Operational Deputy said, BP Migas optimism can reach target lifting already been established at APBN 2008.
"Because our projection arranged bases production sharing's date more than 1 million barrel per day," said Dodi.
To make ensure target realization, he adds, BP Migas will also continually more optimize exploration at amount young field.
"It can’t if just rely old field. We must found new exploration fields. If don't, we will cumbersome. Production realization goes on is down since its artless character," its says.
Need to acknowledge, productions decreased speed old Indonesian fields at average above 10%.
BP Migas really optimism attained target. Its section, there are nine oil and gas fields that will be brought off namely Tangguh want to produce gas, Rokan North Duri (Chevron) produced oil, Tunu 13A (Total Mahakam), Lenggowangi (PetroChina Tuban), Northern Randegan (Pertamina), BOB Pertamina_-Bumi Siak Pusako, Duri Area 12, Duri Area 14, Cepu Field, and Senoro-Toili.
That fields are presumed can make increase production until 60 thousand barrel per day, and mayority product for domestic market.
The Chairman of Board Association for Oil and Gas Indonesian (APMI) Bambang Purwohadi. According to her, lifting 927 thousand barrel per day can be reach.
"That (target lifting , red) maybe easy to get current. But, we more serious if lifting's target until 1,2 million or 1,3 million barrel per day. We must more work hard because we must choose old field to make production increase," he said.
Bambang adds, field explored also potencially. "There are several big field that necessarily deep two three-month it kicks in scale production outgrow, as ExxonMobile Cepu, and Block A which tilled by Medco at Aceh. That field are expected can be close terget lifting," he said.
But, Andang pessimist lifting target can reach since sought after oil all this time just relies from old field.
"There are old fields. Which are new fields approved to Plant of Development and production beginning this year, just Cepu," he said. More oldier field, production more decrease.
"I am pessimist, is not realistic. We was looking three-month its mean, if we see three-month it, more than 927 thousand barrel per day. I think ought to can more largier than target," he said.
BP Migas on March until January 2008 have produced oils average reaches 1,018 million barel per day. So, really puts to shame if BP Migas more hard to get lifting as much 927 thousand barrel per day along 2008.
Andang assesses, actually BP Migas can make increase oil production be more bigger than APBN 2008 if more aggressive searched new field.
But, Dodi said, lifting descent year to year is natural because oil cause production source come from old fields.
"The problem also related job contractor work to propose proposal. So, depend contractor and BP Migas," say Dodi.
In the meantime, The Vice Director Pertamina Iin Arifin Takhyan said, difficult for Pertamina accomplish target WP&B which have been proposed previous to BP Migas. In WP&B that, Pertamina proposes production plan reach 145 thousand barrel per day.
"But, we are pessimist reach number (145. 000 barrel per day) that," allegedly.
Pertamina, he add, only can reache 132.000 barrel per day appropriate schedule target and firm budgets (RKAP).
The government and parliament just can change oil price assumption in APBN 2008 from US$85 for one barrel becomes US$95 per one barrel. Beforehand, APBN assuming scheme was changed previous. On last March 2008, oil price assumption have been set about US$83 become US$85 per barrel.
But, not only that trick to avoid. Oil price fluctuation very disturb budjet state. And, is not impossible oil price will go on increase cause several produsen oil countries won’t make oil price be more cheap.
Even,
The Vice Chairman Chambers of Commerce and Industry Indonesia Community (Kadin) for Energy and Mineral Resources Dito Ganinduto assesses, government shall make raise oil price about 10 percents. That option is realistic. "Subsidy for oil has reached nearly 40% than state expenses. That sizeable, is that healthy?" ask Dito.
With raise oil price, he add, APBN can more expansive to infrastructure, or another development program that will impacted positive on small enterprise and intermediate.
"Economic rotation wheels the better," say Ditto that also officiate Commission member VII DPR Energy and mining area. For entrepreneur, Dito asseses, oil price no make difficult industry, expecialy glutonous energy.
But entrepreneur know all country difficult position when, oil price increase.
The vice chairman Indonesia Parliament for Finance and bugjetr Committee Harry Azhar said, government shall regard to raise oil price.
According to her, APBN 2008 will get most brays if on a par oil price universalizes upon US$100 up to a year forwards. "Since reserve capital at APBN to oil just until US$100 about barel, which is as big as which is Rp4,25 trillion. If above US$100 per barel, therefore no more its fund," say she yesterday.
Politic Cost
In the meantime, almost oil price penetrates US$120 per barel so government has to outsmart mantle trick comes up short to lent fund APBN to buy oil. "Of which outsmarts it, what with reduces subsidy, or lets clear subsidy will swell again, and no fund for that?" ask
According to her, parliament has given politics support at APBN section that words that if happening oil markup that signifikan, therefore government can take option to accession BBM'S price.
"Can even with reduce Rp2.000 subsidy for one liter strikes oil, meanwhile Rp4.500 diesel fuel, if we reduce its subsidy, that really signifikan. We can economize to reach Rp20 trillion," say DPR'S member of that Golkar's Fraction.
Energy policy analyst, Umar Said assesses option accession oil price is realistic. But, must phase, and published background to people.
"Accession oil price gently. why shall ascend. Subsidy that is saved shall also quite a for people. Helping cannikin people not only passes BBM Tok's subsidy, there are many cannikin. Now that gets to subsidise BBM who? Millions persons that have car, not cannikins little people which shall be helped. Government don't khwatir. But, worded to people."
To raise oil price, Umar said, shall also base politics deal with DPR. "DPR don't its opportunist only."
Umar also assesses, its outgrows BBM'S subsidy and electricity that given by government also trim another energy sector growth that doesn't get to subsidise.
Oil price universalize continually been estimated moves up
Oil importer state as
"We can’t pitch upon raise kerosene price, premium, or diesel fuel. We must looking for the other mind and don't hurry raise," said President at
Is not easy make raise oil price when consumed public and energy buys society still low.
Government also won’t pay expensive politics cost because decide unpopular policy.
In condition critical, President instructs to all government and also region government make energy saving to press APBN brayed.
"I instruct for all government institution to make efficiency in vehicle fueled purpose on duty, airs condition included electricity," Presidential said. President also appeals that society also do energy purpose thrift.
"I ask for hotspots and shop centre can also efficiencies for similar thrift. Vehicles fueled consumption on duty and also person also need is drawn the line," explicit President.
If all party wants to be cooperative to face faced energy problem current, President declares for confidence Indonesian nation get to pass through difficult term as current as.
According to the Vice Chairman Commission VII Parliement Soetan Bhatoegana, raising oil price will evoke cause social distortion current people economic condition is no better until now.
The Secretary Democrat Fraction in Parliement urged the government more creative looking for alternative any other like maximize electric project realization 10.000 Megawatt (MW), energy saving etc.
He also bargains, scheme subsidises can be more distribution to poor people. "Now subsidy can enjoyed to all person, well rich people and poor people. Eventually, that subsidy just for poor people."
According to her, the parliament really backs up if government raising oil price. But, Sutan reminds, the government don’t be ambushed parliament attitude because that decision in not popular when majority people still in difficult condition.
M. Yamin Panca Setia
Photo: Tempo
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