Repsol's continued development of the Sakakemang Block is constrained by the gas price which has not been agreed upon. The government and the oil and gas company from Spain still have not agreed on the price that Repsol from Iapangan will sell, which has gas reserves of up to 1 trillion cubic feet or trillion cubic feet (TCF).
Deputy for Finance and Monetization of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Arief Setiawan Handoko, admitted that currently discussing gas prices from the Sakakemang Block is somewhat difficult. To date, Repsol has set gas prices above the US $ 7 per MMBtu. The price is claimed to be in accordance with the economics of the project.
"Currently there are still difficult discussions about the sustainability of Repsol. Currently, we from the Commercial Division are involved in determining whether to continue or not because the economic price of Repsol is different from the price we are trying to sell in Indonesia, "said Arief.
He continued, referring to the latest regulation regarding gas prices, namely Presidential Regulation Number 40 of 2016 concerning Natural Gas Pricing for the industrial sector at a maximum of US $ 6 per MMBtu. With this regulation, SKK Migas also cannot simply emphasize the investment rate return (IRR) of Cooperation Contract Contractors (KKKS). The reason is, this will have an impact on state revenues from oil and gas.
"So we have to balance the economy and state revenues not to change," said Arief.
Sakakemang Block is one of the largest oil and gas discoveries in the world during the 2018-2019 period. With proven natural gas reserves of up to 2 trillion cubic feet, this Repsol finding is the largest in Indonesia for the last 18 years.
Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said, in the initial certification, the amount of reserves included was only 1 TCF of the potential proven reserves of around 2 TCF.
Repsol also has the opportunity to submit a plan of development (PoD) this year with the hope of carrying out the production of the Sakakemang Block in 2021. Acting Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Ego Syahrial said there are still many fields that have not yet entered the POD stage. Therefore, continuous activities are needed in order to accelerate the development of the oil and gas field.
Kontan, Page-12, Friday, August 7, 2020
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