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Indonesia decreases 2020 oil and gas production outlook

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As reported by Reuters, Indonesia’s upstream oil and gas regulator SKK Migas has cut its full-year production outlook for the country, its chairman Dwi Soetjipto told reporters on Thursday, after reporting a drop in oil and gas output in 1Q20.

The coronavirus pandemic and lower oil prices have dealt a further blow to the southeast Asian country’s oil and gas production, which had already been expected to contract for a fourth straight year in 2020.

Ageing fields and delays to new projects have kept output levels below government targets.

Indonesia’s crude oil lifting from January to March stood at 701 600 bpd vs 746 300 bpd in 2019, while gas lifting in the period stood at 5866 million ft3/d compared to 5912 million ft3/d last year.

SKK Migas cut this year’s production outlook for both crude oil and gas to 725 000 bpd and 5727 million ft3/d respectively.

“Global conditions like lower crude oil prices, reduced consumption due to Covid-19 and currency fluctuations have impacted the oil and gas industry,” Soetjipto said.

The productivity of the oil and gas workforce has slowed due to new protocols to curb the spread of the virus, he said.

This means that several projects which were supposed to come onstream this year, like the Merakes offshore gas field project, will see delays, he added.

Indonesia’s crude oil output has been declining for years from a peak of more than 1.5 million bpd in the mid-1990s to below 800 000 bpd now as key fields run dry.

Soetjipto said this year’s state gross revenue outlook from the oil and gas sector had been cut by nearly half, from US$32 billion to US$19 billion now.

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