Indonesia expects oil and gas investment to rise 29% to $17 billion in 2024

Written by Sudarshan Varadhan

BANGKOK, Indonesia is rushing to ramp up drilling and exploration following the recent withdrawals of global giants Shell and Chevron, regulator SKK Migas told Reuters investment in the country’s oil and gas sector will increase by 2024. He said he expects it to increase by 29% in 2020.

As the challenges of financing fossil fuel projects increase, it is critical that oil and gas investment be accelerated quickly for the resource-rich Southeast Asian nation as it seeks to reverse a prolonged decline in production.

Of the investments planned this year, 40% will come from foreign companies including Eni, ExxonMobil and BP, Dwi Soeccipt, chairman of oil and gas regulator SKK Migas, told the Future Energy Asia Conference late Wednesday. He spoke to Reuters on the sidelines.

Mr Soecipto said the investment would also be used to promote exploration and drilling. Oil and gas investment growth in 2024 is expected to reach $17 billion, more than double his 13% expansion in 2023.

“We’re increasing drilling from last year, when we drilled 790 wells. This year we’re planning about 930 wells,” he said, adding that exploration spending will increase to $1.4 billion from $900 million last year.

Exploration spending will include phased investments in projects that will begin production later this decade, he said.

Soecipto said the decarbonization requirements for fossil fuel projects are a major challenge because most of the investment funding comes from foreign banks and there is no immediate path to achieving consistent returns from investments in carbon capture. Stated.

The Indonesian government is keen to reverse this trend and aims to increase shipping to 1 million barrels of oil and 12 billion standard cubic feet of gas per day by 2030.

“Requirements for financing and international companies to meet green targets mean that in the future capital investment may increase without benefiting from carbon capture,” he said. Stated.

Lower oil, gas lift

Soecipt expects annual crude oil pumping in 2024 to be around 600,000 barrels per day, down slightly from 605,000 barrels per day last year. Still, this exceeded SKK Migas’ previous forecast of 596,000 barrels per day.

However, he said natural gas pumping in 2024 will increase by nearly 8% to about 5.7 billion standard cubic feet per day, compared to 5,300 mmscfd in 2023 and 5,544 mmscfd in early 2024, based on contractor work plans. We expect it to exceed.

Development of new gas projects in Indonesia is facing delays due to changes in project ownership, the COVID-19 pandemic, and adjustments to the introduction of carbon capture technology.

He said the improved natural gas production forecast is due to new projects that have recently started production, adding that a final investment decision on the delayed Gengbei field is expected “in the middle of this year.”

This article was generated from the Automata news agency feed without any modifications to the text.