Drilling Rig Constraints, Oil and Gas Contractors Begin Joint Utilization Scheme

OIL AND GAS-JAKARTA. The availability of drilling rigs has been a significant obstacle in boosting national oil and gas production in recent years.

Lately, several oil and gas companies, or Cooperation Contract Contractors (KKKS), have initiated a cooperative scheme for the shared use of drilling rigs, or farm in.

Bayu Kusuma Tri Aryanto, VP SCM Regional 2 of PT Pertamina EP, stated that the procurement of jack-up rigs remains a challenge for the domestic oil and gas industry. One reason is that many rigs have already contracted for drilling activities outside of Indonesia.

"Our challenge is the limited availability of rigs. SKK Migas also challenges us on how to retain the rigs that are already in Indonesia so they don't leave. (Farm in) from the procurement side is more flexible," Bayu said in a press conference on Monday (5/6).

Bayu explained that this joint contract scheme for rig use has been implemented by several KKKS. For example, BP and Pertamina Hulu Energi (PHE) have also adopted this scheme.

Rudi Satwiko, Deputy of Business Support at SKK Migas, explained that the shared use of rig facilities can be carried out between KKKS as long as there is an agreement on the contract and time.

"For example, BP has a five-year contract. There will be some empty windows, we can place other KKKS. So, we collaborate on the schedule. That's what's called a farm-in," Rudi clarified in the same event.

Rudi added that jack-up rig facilities are now starting to become available. However, several aspects such as quality, delivery schedule, and cost are still obstacles. Therefore, the farm in scheme is seen as a solution to these needs.

In recent years, the availability of rigs has remained a significant obstacle in promoting oil and gas drilling activities in Indonesia. Yet, almost every year, SKK Migas and KKKS continue to increase drilling activities in pursuit of a production target of 1 million barrels per day (bpd) by 2030.