The Upstream Oil and Gas Regulatory Task Force (SKK Migas) is encouraging contractor cooperation contract (KKKS) to capitalize on the current surge in global oil prices.
Hudi Suryodipuro, Head of Program and Communication Division at SKK Migas, said that this oil price surge momentum will prompt KKKS to expedite activities already included in the current year’s work plan.
He said further that KKKS would strive to enhance the identification of additional workover and stimulation activities to increase production.
“Because with higher prices, it becomes more economically viable,” Hudi said on Friday, April 19, 2024.
On the other hand, Hudi noted that timely implementation of projects throughout this year is also expected to boost state revenues from the upstream oil and gas sector amidst the strengthening trend of global crude oil prices.
“Certainly, SKK Migas will focus on ensuring that the 2024 activity plans are executed according to schedule so that the high oil price momentum can contribute to additional government revenues,” he said.
Based on Bloomberg data on April 19, 2024, the West Texas Intermediate (WTI) oil price for March 2024 contracts rose by 3.60 percent or 2.98 points to $85.71 per barrel at 9:30 AM Western Indonesia Time. Meanwhile, the Brent oil price for June 2024 contracts increased by 3.44 percent or 3 points to $90.11 per barrel at 9:29 AM Western Indonesia Time.
It is noted that crude oil prices have been higher this year, driven by worsening Middle East conflicts and supply cuts from OPEC+. On the other hand, the government is exploring the potential for alternative crude oil imports to anticipate supply disruptions due to the escalation of the Iran-Israel conflict this week.
Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said that his ministry has mapped several regions that are relatively independent from Middle Eastern oil supplies and shipping routes.
“If we look at the map, we can see that we can source from some African regions, as well as from Latin America, but Venezuela is seized [by the US embargo],” Arifin said on Friday.
Regarding the potential from Latin America, Arifin detailed that further exploration of crude oil purchases could be drawn from Guyana. Meanwhile, oil imports from Mozambique could serve as an alternative for the African region.
