Pertamina to invest $40 million to boost production by 37,000

State oil and gas firm Pertamina and its oil contractors has allocated up to US$60 million in investment fund to revive old and marginal wells in Sumatra, Kalimantan and Java to meet an increase of crude oil quota for Indonesia by 37,000 barrels per day. Pertamina president Baihaki Hakim said that the cost to drill new wells or revive an old wells would be about the same, that was about $1 million per well.

And Pertamina would need about 40 wells to produce about 37,000 barrels per day as one well, on average, could produce about 1,000 barrels of crude oil.

"It means that it will need $40 million in new investment. The amount of that investment is not big, compared with the high crude oil price of $30 per barrel. Moreover, with a tendency of increase oil prices, this investment is very attractive," he said. Baihaki noted that the increase in crude oil quota for Indonesia had actually been effective as of July 1. But Indonesia could not yet use the quota. Therefore, Pertamina and its contractors should work quickly to increase productions. Otherwise, the quota will be taken over by other countries, especially those in the Middle East. (*)