JAKARTA (Reuters) - Indonesia’s upstream oil and gas regulator has lowered its peak gas output estimate for the Indonesia Deepwater Development (IDD) project after operator Chevron Corp cut investment due to a change in the facility’s design, a regulatory official said on Thursday.
Peak output is now expected to reach around 700-800 million standard cubic feet per day (mmscfd), compared with an initial estimate of over 1 billion cubic feet per day (bcfd), when the remaining two gas hubs start production, Fatar Yani Abdurrahman, deputy chairman of regulator SKK Migas, told reporters.
The lower estimate was due to the design change, including using shallow water platform instead of deep water, Abdurrahman said on the sidelines of an industry forum.
Last year, the government said Chevron planned to halve its investment for the project to $6 billion from $12.8 billion, but targeted production would remain the same at 1.1 million bcfd and 31,000 barrels of condensate.
The project began production from the Bangka field in 2016 and Chevron is in the process of developing the Gendalo and Gehem gas hubs off the coast of East Kalimantan.
Production from the two gas hubs combined is expected to reach 700 mmscfd, though Bangka’s output has declined, Abdurrahman said.
“Now, Bangka production is already depleted to below 100 mmscfd, to around 60 mmscfd,” he said.
Chevron and other stakeholders in the project, Italy’s ENI and China’s Sinopec, are in a discussion for a revised plan of development, which they will hand over to SKK Migas for approval.
“Now, we’re just waiting for the decision from Chevron and partners. The later they submit it, the project will be more delayed and it will be more costly,” he said.
The regulator has pushed Chevron and its partners to speed up their talks so that the project can meet an onstream target of 2024.
Reporting by Wilda Asmarini; Writing by Gayatri Suroyo; Editing by Subhranshu Sahu