Potential oil and gas production fell by 50%

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Potential oil and gas production fell by 50%

Thursday, 25 February 2010 09:15

JAKARTA: Production of oil and gas potential fell by 50% from current capacity to determine if the regulation about environmental quality standards in accordance with the mandate of the Law No.32/2009 about the environment really effective 1 April 2010.
In fact, the industry affected by the enactment of the Act ittu not only in oil and gas sector, but also the mining sector.
In fact, some investors to postpone activities due pengeborannya was required to meet the conditions and finished in the Ministry of Environment.

Director General of Oil and Gas Ministry of Energy and Mineral Resources (ESDM) Evita Herawati Legowo, said this year is targeted oil production reached 965,000 barrels per day (bpd) this year.

"However, the new target is reached around 98% and will be more severe if environmental regulations, particularly those governing environmental quality standards, implemented on April 1. The production could drop by 50%," he said yesterday.

Law No. 32/2009 on the environment is the amendment of Law No. 23/1997. The Act itself was enacted in October 2009 and declared effective on April 1, 2010.

Some points of law that have become critical of business is the duty of waste water temperature decreased from 45 degrees Celsius to 40 degrees Celsius and zero flare policy (zero exhaust gases).

In addition to environmental quality standards issues, ready to confront the threat of criminal if the regulation is not obeyed.

Based on the results of talks with oil and gas industry, added Evita, temperature reduction targets wastewater is very difficult to implement in the near future.

Barriers in the form of industry needs new tools must be installed with the installation of time long enough but it's an investment instrument is also quite expensive.

Some companies that are affected by these policies are PT Chevron Pacific Indonesia and PT Pertamina (Persero).

In fact, both the contractor is the main contributor to the national production, so if they are directly affected will have an impact on national production.

"Contractors need to add oil and gas production equipment will take approximately 2-3 years. If there is no pause time, which means that the rules must apply April 1, with the risk if a criminal violation of worn, oil and gas field would not want to be closed," said Rudi Rubiandini, Vice Chairman of the Supervisory Team Production Increase Oil and Gas.

For this condition, the Director General of Oil and Gas Evita Herawati Legowo has suggested the Ministry of Energy and Mineral Resources met with the Ministry of Environment to talk about it. "One result of that discussion, the Ministry of Energy and Mineral Resources was also asked to propose other matters that are considered to interfere with the performance of oil and gas industry."

In contrast to the statement of Evita, Deputy Improvement Conservation of Natural Resources and Environmental Degradation Control Ministry of Environment Masnellyarti Hilman confirmed that the Act continue to apply effective as of 1 April, and no further extension of time for socialization of the regulation shall be deemed sufficient.

"Many companies that have met the proper ranking is an indicator of environmental management. So there should be no extension of time to the application of the law."