SKK Migas targets the end of November

 

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) targets that drilling in the Rokan Block will begin next month. SKK Migas Operations Deputy Julius Wiratno said that currently, PT Chevron Pacific Indonesia (CPI) is still converting two units of rigs to be used for drilling.

Blogger Agus Purnomo in SKK Migas

In addition, CPI has procured several service jobs that support drilling activities. Julius said SKK Migas and CPI continued to make efforts so that the drilling activity could begin in November according to the agreement.

PT Chevron Pacific Indonesia (CPI)

"The target is the end of November," he said.

Sonita Purnomo

When confirmed, the CPI was still reluctant to explain the details of drilling preparations that will begin next month. CPI Corporate Communication Sonita Purnomo said that her agency continues to have intensive discussions with SKK Migas before starting the drilling.

"PT CPI continues to have intensive discussions with SKK Migas to finalize the detailed implementation of the heads of agreement to support the commencement of drilling activities," She said.

the Rokan block by Chevron

SKK Migas and CPI have agreed on ahead of agreement (HoA) on September 28, 2020, for investment in the transition period for the Rokan work area (WK). CPI will remain investing in 2020-2021. This investment is an effort to increase production in the Rokan block working area during the transition period before being transferred to the management of PT Pertamina (Persero) in August 2021.

Bisnis Indonesia, Page-5, Saturday, Oct 31, 2020

Drilling of the Rokan Block well has the potential to be delayed to December

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the drilling of wells in the Rokan Block will be carried out in late November or early December. Currently, rig procurement is underway.

Blogger Agus Purnomo In SKK Migas

    Deputy for Operations of SKK Migas Julius Wiratno said that the government and PT Chevron Pacific Indonesia (CPI) had signed the main agreement for the implementation of operations during the transition period of the Rokan Block. Currently, Chevron is preparing a rig that will be used to drill this well, along with its supporting service contracts.

the Rokan Block

"At the end of November or early December, drilling will be carried out in the Rokan Block," he said.

PT Chevron Pacific Indonesia (CPI)

    According to Julus Wiratno, the rigs that are currently available are rigs that are usually used to workover wells. As a result, Chevron needed time to convert the rig to be used for infill well drilling. However, as planned, 11 wells will be drilled in 2020.

"After that in 2021, about 6 rigs will be added to carry out drilling. After that, PT Pertamina (Persero) will continue in August 2021, "added Julius.

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto explained that the total investment for drilling wells in the Rokan Block in 2020-2021 is around the US $ 154 million. In detail, Chevron will drill 11 wells in 2020 and 107 wells in 2021. This year, the annual average additional oil production from this drilling is only 500 barrels per day (BPD).

"But in 2021, additional production will reach an average of 5 thousand bpd," he said.

    He emphasized that his party is focused on overseeing the implementation of the transfer of management of the Rokan Block from Chevron Indonesia to Pertamina as well as possible. One of them is the process of procuring goods and services, in which out of the 19 procurement packages needed, 10 packages have been contracted.

"SKK Migas will conduct supervision," said Dwi.

    Regarding Pertamina's potential partners in managing the Rokan Block after August 8, 2021, Dwi did not answer because it was Pertamina's authority. However, until now, he admitted that he had not received a report from Pertamina regarding his potential partner.

"We focus on securing the stage when Pertamina enters, with a better level from the production side," he said.

Arifin Tasrif 

    Previously, Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif reminded Chevron and SKK Migas to realize the provisions agreed upon in the HoA. This is because the implementation of this provision will have an impact on efforts to achieve the national oil and gas production target next year according to the 2021 APBN macro agreement.

"We will continue to monitor its implementation periodically to ensure the commitment of all parties goes according to the agreement, especially the certainty of the implementation of drilling activities which will start in November 2020," said Arifin.

    This year, the Rokan Block is targeted to produce 170,000 bpd of oil. Until the end of last June, the realization of this block's oil production was recorded to have exceeded the target, reaching 176,298 bpd. However, this realization fell when compared to production in 2019 which reached 190,131 thousand bpd. The Rokan Block is the second-largest oil producer in Indonesia.

Investor Daily, Page-10, Friday, Oct 30, 2020

Pertamina is considering PLN's electricity offer for the Rokan Block

    PT Pertamina (Persero) is building communication with various parties for the operational preparation of the Rokan block working area, including the provision of electricity and steam which are indispensable in supporting the continuity of oil production activities. One of them is the State Electricity Company (PLN).

the State Electricity Company (PLN)

    Pertamina SVP Corporate Communication & Investor Relations Agus Suprijanto said that oil production currently reaches 170,000 barrels of oil per day (around 25% of national oil production). He revealed that PLN had submitted an initial offer to Pertamina regarding the provision of electricity and steam.

"Pertamina welcomes PLN's desire to provide electricity and steam supply for the Rokan block working area starting August 9, 2021. By cooperating with BUMN in the electricity sector, we hope that the preparation of post-management transfer of electricity and steam supply will remain safe. PLN together with PHR will conduct intensive discussions regarding this matter in the near future, "said Agus.

the Rokan Block Work Area By Chevron

    Currently, the Rokan Block Work Area receives electricity and steam supply from an integrated power system which includes 3 main power generation facilities, namely Minas Gas Turbine, Central Duri Gas, and North Duri Cogen (NDC). 

    Regarding PLN's offer to provide electricity and steam in the Rokan block Work Area, Agus said that currently Pertamina has submitted a response and is waiting for a further proposal from the power company and hopes that the discussion of the Electricity and Steam Sale and Purchase Agreement with PLN will go well and signed in November 2020.

"Synergy among energy SOEs do not only increase portfolios that mutually reinforce operational performance in each business sector, but also hopefully encourage the government's strategic development projects to run well according to the expected target," said Agus.

Investor Daily, Page-10, Friday, Oct 30, 2020

As of September, the National Oil Lifting Exceeds the Target

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted that the realization of ready-to-sell oil production (lifting) until last September reached 706 thousand barrels per day (BPD) or exceeded the Revised State Budget target of 705 thousand BPD. 

Blogger Agus Purnomo in SKK Migas

    Until the end of the year, SKK Migas is optimistic that it will be able to keep oil lifting from falling below the target.

Dwi Soetjipto

Head of SKK Migas Dwi Soetjipto said that the realization of national oil and gas lifting until the end of last September was very good, namely, 1.68 million barrels of oil equivalent per day / BOEPD or 99.6% compared to the APBN target of 1.69 million BOEPD. This achievement was supported by oil lifting which exceeded the target even though gas lifting was still under pressure from the decline in gas demand due to the Covid-19 pandemic.

"Oil lifting reaches 706 thousand BPD or 100.17% of the APBN-P. Meanwhile, gas is 5.502 million standard cubic feet per day / MMScfd or 99.03% of the target of 5,506 MMScfd, "he said.

As a result of the Covid-19 pandemic, he admitted, the implementation of oil and gas operations was not as expected. As of September, the realization of new development wells was 188 wells or only 48 percent compared to the target of 395 wells. By the end of the year, the number of development wells drilled is estimated to be only 252 wells, lower than the realization in 2019 of 322 wells.

Meanwhile, the realization of the workover activities was very good. As of September, the realization of workover activities was recorded at 444 wells or 53% of the target of 837 wells and is projected to reach 603 wells by the end of the year. Likewise with well maintained, which realized 18,746 activities or 67% of the target of 28,151 activities and is projected to reach 25,184 activities by the end of the year.

"Workover and well service are still very good because they involve current oil and gas production," Dwi explained.

He added that the main impact of the pandemic on exploration activities. As of September, his party noted that the realization of 3D seismic activities only reached 918 square kilometers (km2) or 27% of the target of 3,421 km2 and the realization of exploration wells was only 19 wells or 51% of the target of 37 wells. Only 2D seismic activities were very good, namely, 26,929 km realized from the target of 28,324 km.

Dwi admitted efforts to optimize oil and condensate production was not easy. From the start of the proposed cooperation contract (KKKS) for this year's oil production of 673 thousand BPD, his party managed to secure a commitment at the level of 707.2 thousand BPD.

However, due to the impact of the Covid-19 pandemic, there was a decline in the production of 32 thousand BPD so that oil production remained at 704 thousand BPD. His party then sought an additional 2.9 thousand BPD. Furthermore, for gas, his party managed to obtain additional production from the absorption optimization of 70 MMScfd. 

    Additional absorption comes from the East Kalimantan System of 21 MMScfd, West Natuna Transportation System (WNTS) 17 MMscfd, Grissik-Singapore 29 MMscfd, and Medco Malaka 3 MMscfd. So that, until the end of the year, his party is still projecting oil and gas lifting on target.

"The outlook until the end of the year with various problems remains 705 thousand BPD for oil and 5,502 MMScfd for gas," Dwi said.

Maintain Investment

Dwi continued, globally, the Covid-19 pandemic and the fall in crude oil prices had an impact on reducing investment by oil and gas companies. Until the end of September, his side recorded that the realization of upstream oil and gas investment was US $ 6.9 billion, or only 50 percent of the US $ 13.8 billion targets. However, at the end of the year, he is optimistic that upstream oil and gas investment could reach the US $ 11.1 billion or 80.44% of the target.

Investor Daily, Page-10, Monday, Oct 26, 2020

Banyu Urip Crude Oil Will Be Exported

The Special Task Force for Upstream Oil and Gas Implementation (SKK Migas) plans to export crude oil produced by the Banyu Urip oil and gas field. 

ExxonMobil Cepu Limited's (EMCL) in Banyuurip Field

    This plan emerged because PT Pertamina (Persero) as the buyer of ExxonMobil Cepu Limited's (EMCL) field crude oil was no longer able to fully purchase it. Pertamina has excess crude oil stocks due to reduced refinery demand as a result of the Covid-19 pandemic.

Blogger Agus Purnomoin SKK Migas

Deputy of Finance and Monetization of SKK Migas, Arief S. Handoko, said that currently, the Banyu Urip Field has the potential to experience a reduction in production as a result of Pertamina not being purchased. Referring to SKK Migas records, until August 2020, Banyu Urip Field oil production reached 220,000 barrels of oil per day (BPD).

Banyu Urip Field

"Why can't it be done? Because Pertamina has a lot of stock and demand for refineries has decreased due to Covid-1 9, "said Arief.

The plan for exports and reducing production is of course contrary to the fact that domestic oil imports are high. Arief also admitted that so far Pertamina has been importing crude oil and importing fuel oil (BBM) products. As a result of falling demand, the domestic market oil purchases from Banyu Urip have stalled.

"If the export option is carried out, we have met the KPK for permission or asked for opinions if we export prices below the ICP. We involve several parties in order to maintain compliance or issues that may come later, "said Arief.

VP of Corporate Communication of PT Pertamina, Fajriyah Usman, said that his party was still buying the state's share from the Banyu Urip field, although it was decreasing due to lower demand.

"The decline in purchases of crude for processing at refineries is around 20 percent in line with the drop in demand for fuel oil (BBM)," he said.

Encouraging Upstream Incentives

    SKK Migas strives to provide incentives for the upstream oil and gas sector to be implemented. Head of SKK Migas Dwi Soetjipto said the provision of incentives was an effort to restrain the decline in upstream oil and gas investment as a result of the corona outbreak (Covid-19).

Dwi Soetjipto

"We are taking steps to avoid a bigger decline. There are nine stimuli that have been and are being processed," Dwi said.

    Of the nine types of incentives proposed, only one has been approved, namely post-abandonment and site restoration (ASR) activities. There are 30 oil and gas contractors who have enjoyed relaxation from the delay in depositing ASR funds this year. Then there are a number of incentives included in the proposed fiscal improvement, namely the elimination of upstream oil and gas rental fees for state property (BMN).

Kontan, Page-12, Monday, Oct 26, 2020

First, the Restructuring of the Business Is Running Smoothly

PT Pertamina (Persero) ensures that the restructuring process of the company is carried out according to what is customary in the business world. Currently, the restructuring process is still in a transition period to ensure Pertamina and the entire group business are ready for the next process. 

Blogger Agus Purnomo in SKK Migas

    SVP Corporate Communication & Investor Relations of Pertamina Agus Suprijanto said Pertamina restructuring is a mandate for shareholders that must be realized. In the process, management always considers strategic aspects, procedures, and handling of all company assets, including employees, in accordance with applicable legal regulations.

"The company restructuring carried out by Pertamina currently has common practices in efforts to improve company performance and efficiency, as has happened in various other global energy companies. When restructuring, the company also goes through a transition period, "said Agus.

Agus said the legal position or legal standing regarding the formation of a holding and group business is clear. Regarding assets, Agus confirmed that until now there has been no transfer of Pertamina's assets to other group businesses or subsidiaries. 

    The status of the management of the work area of ​​the upstream subsidiary that has contracted with the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) remains the same. Agus said regionalization was carried out to coordinate and ensure that upstream oil and gas operations were integrated so that operations would be more efficient.

Agus denied accusations that Pertamina's restructuring had hampered operations and strategic projects. According to him, so far all business processes and operations from upstream to downstream have been running well.

"This shows that Pertamina's business processes are fine, not messy. In terms of work procedures, management has also issued regulations governing workflow and authority during the transition period, ”said Agus.

Regarding refinery revitalization and construction, Agus said, until now the refinery development master plan and grass-root refinery (RDMP / GRR) projects are still ongoing according to predetermined stages. In general, all projects showed clear progress and went well with management monitoring.

"The restructuring process is carried out in stages. In the current transitional period, we ensure that all restructuring preparations are complete, ”said Agus.

The Ministry of State-Owned Enterprises (BUMN) stated that Pertamina's restructuring was carried out to answer the needs of the oil and gas industry. Special Staff to the Minister of BUMN, Arya Sinulingga, said that the energy sector continues to undergo transformation or change, which demands that Pertamina be able to adjust. There are five sub holdings that have been formed, including the upstream sub-holding whose operations are held by PT Pertamina Hulu Energi (PHE).

Then, there is PT Perusahaan Gas Negara (Persero) Tbk as a gas sub-holding and refinery and petrochemical sub-holding run by PT Kilang Pertamina Internasional. Power and NRE sub-holding (PT Pertamina Power Indonesia) and commercial and trading sub-holding (PT Patra Niaga). The shipping company operation is held by PT Pertamina International Shipping.

Republika, Page-9, Monday, Oct 26, 2020

Nominations for Seven CSR Programs PEP Asset 4 CSR Award 2020

 

PT Pertamina EP (PEP) Asset 4 has again successfully submitted 7 Corporate Social Responsibility (CSR) programs in the prestigious Nusantara CSR Award 2020 event initiated by La Tofi School of Corporate Social Responsibility (CSR).

Ramayana Terrace Hotel Indonesia Kempinski Jakarta

    This event was held differently from the previous year due to the impact of the CoVid-19 Outbreak, so this award was held online and offline which coincided at Ramayana Terrace Hotel Indonesia Kempinski Jakarta.

La Tofi School of Corporate Social Responsibility (CSR)

La Tofi explained that this award event is an appreciation of the work programs that have been carried out by companies both government, state-owned or private institutions that have a commitment and contribution to environmental sustainability and community empowerment.

This award will motivate the public relations function at Pertamina EP (PEP) Asset 4 to be able to always deliver quality CSR programs and have a direct impact on the people in need.

Duta Masyarakat, Page-6, Monday, Oct 26, 2020

Additional Pertamina Split Awaits the Approval of the Minister of EMR

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that PT Pertamina (Persero) 's split changes in several of its oil and gas blocks are still waiting for the approval of the Minister of Energy and Mineral Resources (ESDM).

Blogger Agus Purnomo in SKK Migas

However, this additional split has the potential to increase oil reserves by 120 million barrels and gas by 1.7 trillion cubic feet. Deputy of Planning for SKK Migas, Jaffee Suardin said that discussions regarding the proposed additional split of Pertamina in several of its oil and gas blocks have now reached the final stage. Furthermore, to realize the additional split, his party needs approval from the Ministry of Energy and Mineral Resources.

"It needs approval from ESDM because there will indeed need to be something approved by the Minister of EMR," he said.

Jaffee revealed that the proposed additional split was through long discussions with his party. The reason is that this proposal was initiated by his party's efforts to seek oil and gas potential that could be developed but had not yet been included in Pertamina's long-term plan. Furthermore, his party issued a recommendation to the Ministry ESDM.

"We want to try it in the future, for 1-2 months, so that we can finish it," he said.

According to him, this additional split has the potential to generate oil and gas reserves for Indonesia without having to wait for exploration activities to be carried out. Not only that, but this step will also increase the economy of the oil and gas block for up to 10 years.

"What is being discussed now is to add approximately 120 million barrels of oil reserves and 1.7 trillion cubic feet of gas," said Jaffee.

He said the additional split proposal did not end only for Pertamina. His party will continue to look for oil and gas potentials in other working areas that can be developed in the future.

"The point is, the more aggressive and efficient," he added.

Previously, Director of Development and Production of PT Pertamina Hulu Energi (PHE) Taufik Aditiyawarman said that his party had proposed an additional split for the Mahakam Block and the Sanga-Sanga Block. In addition, his party is still reviewing the proposed changes to the results of the East Kalimantan Block, Offshore North West Java (ONWJ), and Offshore Southeast Sumatra (OSES). These five blocks are termination blocks managed by the company.

Deputy of Monetization and Finance of SKK Migas, Arief S Handoko, revealed the potential for increased gas production from oil and gas blocks in East Kalimantan or the East Kalimantan System. This is after the incentives being proposed by Pertamina for the Mahakam, Sanga-Sanga, and East Kalimantan blocks. The existence of incentives will encourage more massive operations and well drilling activities.

the Mahakam Block

"In 2021, the Mahakam Block could reach more than 500 million standard cubic feet per day / MMScfd, not yet from the others," he said.

Taufik had said that if the profit-sharing was improved, his party was committed to increasing the production of the oil and gas block.

"Of course, with a better economy, it will maximize the monetization of the potential in the oil and gas block, increase reserves and future production," he said.

Pertamina signed a production sharing contract / PSC) for the Sanga-Sanga Block, East Kalimantan, and the OSES Block with a gross split scheme in 2018. Likewise, the amendment to the Mahakam Block PSC uses a cost recovery investment scheme. The ONWJ Block contract was signed in 2017.

Referring to the contract, Pertamina's profit-sharing in the SangaSanga Block is set at 49% for oil and 54% for gas. Meanwhile, in the East Kalimantan-Attaka Block, the company gets 61 percent for oil and 66 percent for gas. Furthermore, Pertamina's profit-sharing in the OSES Block is set at 68.5% for oil and 73.5% for gas.

In the ONWJ Block, Pertamina previously obtained additional splits through ministerial discretion and changes to the gross split scheme. Initially, Pertamina's profit-sharing in this block was 57.5% for oil and 62.5% for gas. At the end of 2017, this revenue-sharing amount increased to 73.5% for oil and 81% for gas. The five termination blocks worked by Pertamina are included in the list of 10 largest oil and gas producers in Indonesia. 

    Referring to SKK Migas data, the realization of oil lifting in the Mahakam Block was recorded at 29,361 barrels per day (BPD) from the Revised State Budget (APBN-Amendment) target of 25 thousand BPD and 558 MMScfd of gas from the target of 510 Mmscfd.

Furthermore, the oil lifting of the ONWJ Block was 28,893 BPD from the target of 27,500 BPD and gas 71 MMScfd of the target of 58 MMScfd. Following are the achievements of OSES Block oil lifting of 26,542 BPD from the target of 24,010 BPD, East Kalimantan 9,862 BPD from the target of 11,380 BPD, and Sanga-Sanga 12,515 BPD from the target of 12,030 BPD.

Investor Daily, Page-9, Saturday, Oct 24, 2020

Nicke Widyawati is in the rank of the 16 most influential women in the world

 

Global business media, Fortune named Pertamina's President Director Nicke Widyawati as the Most Powerful Woman in the World 2020. Nicke was ranked 16 out of 50 women in the world who were considered to have the ability to control the company they lead. Fortune assessed that Nicke was able to handle a state-owned company with annual revenue of more than US $ 54.6 billion and 32,000 workers worldwide.

Nicke Widyawati

Nicke's ability to control the company was strengthened by the government's trust to re-elect him to lead the company's transformation into a holding company in the oil and gas sector. In response to this, Nicke was grateful and received positively for Fortune's coronation as one of the most influential women in the world by Fortune. Nicke considered that Fortune's ranking was an appreciation not only for herself but also for the entire Pertamina team.

Pertamina 

According to Nicke, as the top level of leadership at the national state-owned oil and gas company, he has the responsibility to ensure Pertamina continues to provide energy for the nation and state and to bring Pertamina as a global energy company that is the driving force for national economic growth.

"The challenges of the future of energy are in sight, and we still prioritize service to the nation, community service, and respond to global energy challenges. This position is the result of the hard work of all elements in Pertamina and also the support of all stakeholders and the Indonesian nation, ”said Nicke.

Fortune also considered Nicke Widyawati as the President Director of Pertamina very worthy of being ranked 16 because he was able to innovate in controlling the company during the Covid-19 pandemic so that Pertamina's losses could be suppressed, far better than other global oil and gas companies.

Fajriyah Usman

VP of Corporate Communication of Pertamina, Fajriyah Usman, said that this list was an annual ranking that specifically highlighted the most influential women in international-based business. Mrs. Nicke Widyawati is the only Indonesian woman on the list of 50 Most Influential Women iN Fortune's 2020 world.

Fortune also placed Pertamina's Managing Director ahead of the CEOs of various well-known companies in the global arena, such as Temasek, which is the largest state-owned company in Singapore, Shell, a Dutch multinational oil and gas company, and other leading CEOs such as Unilever, PepsiCo, Novartis, Puma Energy, Starbucks, Morgan Stanley , etc.

"This achievement makes Pertamina and Indonesia proud. Mrs. Nicke has represented all women in Indonesia in world recognition, "said Fajriyah.

Fajriyah believes this recognition will be an inspiration and role model for all Pertamina employees to continue to work hard to provide energy and bring Pertamina as a global oil and gas company. The concern of Pertamina's Board of Directors, the Board of Commissioners, and all levels of Pertamina's management is how to manage a company that can produce the best performance that can contribute to the nation and state.

"We hope that international trust will continue to increase in Pertamina, which carries a vision as a world-class national energy company and is able to face the global energy challenges going forward," said Fajriyah.

Investor Daily, Page-10, Friday, Oct 23, 2020

The Efficiency of the Rokan Block Oil Pipeline Project

    PT Perusahaan Gas Negara Tbk (PGN) has made the efficiency of the oil pipeline project in the Rokan Block a new standard for infrastructure projects it undertakes, especially in implementing National Strategic Projects (PSN). 

    President Director of PGN Suko Hartono stated that the PGN Group is committed to striving for the best support for PT Pertamina's Oil and Gas Holding so that the transition process for the management of the Rokan Block runs smoothly and can increase the achievement of financing efficiency.

The Rokan Block

    In principle, the Rokan oil pipeline project is an effort to boost efficiency in Indonesia's energy budget, in line with the government's efforts to reduce oil imports. In addition, the Rokan Pipe project is an effort to support the Government's program in increasing the lifting and effectiveness of oil distribution from the Rokan Block, which is the backbone of national petroleum production, as well as one of the largest oil blocks in Indonesia.

    With competence in developing oil and gas infrastructure and distributing energy both natural gas to all sectors, PGN seeks to improve the effectiveness and efficiency of energy distribution. The Rokan oil pipeline is one of the biggest energy projects this year which has successfully implemented a budget efficiency of Rp 2.1 trillion.

    This is in line with pandemic conditions that require a high level of efficiency in the implementation of investment and operation activities. In addition, the Rokan oil pipeline project also involves 60% of local workers, so that it can provide great benefits to the surrounding community for economic recovery during the pandemic. The estuary of this investment operation is also aimed at driving the wheels of the regional and national economy.

"Regarding the selection of partners and partner schemes for the Rokan Oil Pipe Construction Project, the process is still under internal review by Pertagas as a subsidiary of PGN. PGN as the parent and Subholding Gas is committed to the implementation and completion will be on time. As for project implementation, it is adjusted to the ongoing process, and in accordance with project implementation rules. We appreciate the attention of many parties regarding this national strategic project to take place immediately and we ensure that the project preparation process is nearing its final stage so that it can be implemented immediately, "said Suko Hartono.

    Suko explained that the financing scheme for the Rokan Pipe construction project had been carried out in accordance with a study of the economic principles of a project. The review process is carried out in accordance with internal procedures that have involved elements of the Board of Directors and Board of Commissioners by prioritizing GCG principles.

    PGN is open to safe reporting through a whistleblower mechanism if there are things that are not in accordance with the principles of GCG in the company. With this mechanism, the reporter is guaranteed protection if he finds or suspects non-transparent activity at PGN. 

    Reporting obtained from the Whistle Blowing System (WBS) mechanism will receive attention and follow-up, including the imposition of appropriate penalties or sanctions in order to provide a deterrent effect for perpetrators of violations and for those who intend to do so. PGN opens access to reporting on actions that are detrimental to the company/environment/community through https://wbs.pgn.co.id

Investor Daily, Page-10, Thursday, Oct 22, 2020

To Increase Liquefied Natural Gas Business, PGN Collaborates with JCCP

    PT Perusahaan Gas Negara Tbk (PGN) is working with the Japan Cooperation Center Petroleum (JCCP) to study and improve the gas value chain, especially the liquefied natural gas / LNG business. The target is that the two parties will agree on a Joint Project according to the existing business potential.

    PGN's Director of Strategy and Business Development Syahrial Mukhtar said this collaboration also aims to promote the development of natural gas management technology. Through this cooperation, the increase in the gas value chain or LNG business is carried out based on the experience of Inpex, one of the Japanese oil and gas companies under the auspices of JCCP, with the Naoetsu model. The collaboration of JCCP, Inpex, and PGN is expected to increase capabilities and optimization in more real cooperation in the future.

Inpex Corporation

"In the next three years, the topic of the Joint Project will be mutually agreed upon according to existing business needs and potentials," he said.

    He explained that Naoetsu itself is the name of Inpex's LNG terminal. Through this model, study the technical, operational, business, and safety aspects of the Naoetsu Terminal can be one of the bases for learning and implementing collaborative natural gas projects in Indonesia. 

    In this collaboration, JCCP as the executor will prepare a work plan, project implementation schedule, and estimate the number and project description for this year. According to him, for 2020-2021, there are two collaborations with the JCCP, namely the Naoetsu Seminar and the Technical Cooperation Program.

"This year's Technical Cooperation Program is the LNG Joint Study in Arun Aceh and LNG bunkering throughout Indonesia. In its implementation, this joint study involves INPEX, which is a partner of PGN in the supply of LNG to Myanmar through the Arun Terminal, "explained Syahrial.

    The Naoetsu Seminar program is targeted to introduce Inpex's natural gas value chain and obtain technical studies on the operations of the Naoetsu Terminal which is located in Nagaoka, Japan. The operational technical study of the Naoetsu LNG Terminal includes underground gas storage in Nagaoka, operational safety, and health at the LNG terminal and pipeline, as well as other commercial issues in the gas business in Japan.

    Inpex is the largest oil and gas company in Japan with global exploration, development, and production projects in 20 countries. Meanwhile, JCCP is a government organization under the auspices of the Ministry of Economy, Trade, and Industry (METI) in Japan and consists of oil and gas companies. 

    Syahrial said that this collaboration was because PGN was looking for partners to implement a Joint Project to improve the domestic natural gas value chain. Meanwhile, Japanese industrial engineering is considered qualified, both in knowledge and technology related to gas chain modernization.

"Until finally this Joint Project was proposed with the JCCP," he said.

Investor Daily, Page-10, Tuesday, Oct 20, 2020

PGN Supports the Regional and National Economy in the Rokan Oil Pipe Project

    The PT Perusahaan Gas Negara Tbk (PGN) group is committed to providing the best support for the Oil and Gas Holding of PT Pertamina (Persero) so that the transition process for the management of the Rokan Block runs smoothly and can increase the achievement of financing efficiency. This was done through the implementation of the Rokan Oil Pipe National Strategic Project (PSN).

    In the construction of the Rokan Oil Transmission Pipe, PGN is targeting to have a positive impact on regional development. This is because the development of this national strategic project involves more than 60% of the scope of construction and local manpower.

"With the development that involves local resources, it is hoped that the multiplier effect will be able to contribute significantly to increasing human resource capacity and transfer of knowledge in the regions," said PGN President Director Suko Hartono.

    According to Suko, empowering local entrepreneurs and workers also supports the economic empowerment of local communities during times of crisis. Then the knowledge transfer that is expected to occur can provide benefits in human resource management, especially in the aspects of technological and commercial understanding in the construction of the Rokan Oil Pipe.

"The construction of the Rokan Oil Pipeline Project is a strategic project that is full of risks and costs a lot, so it requires increased mastery of technology and a good understanding of the commercial aspects. These two aspects are the main benchmarks so that the results can be optimal and provide broad benefits, "added Suko.

    Through PT Pertagas as the executor of the construction, cooperation has been made in the procurement of steel pipe material for the Rokan Oil Pipe with PT Krakatau Steel. From this collaboration, it is targeted to reduce the cost of material procurement by 16% and provide added value to the domestic steel industry because it is an effort to increase the use of domestic products (P3DN).

the Rokan by Chevron

"In principle, the construction of the Rokan Oil Pipe is an effort to boost efficiency in the energy budget in Indonesia, in line with the government's efforts to reduce oil imports. "With a Capex value (capital expenditure) of US $ 300 million, the efficiency optimization obtained is the US $ 150 million or around Rp 2.1 trillion, because the initial Capex allocation value was the US $ 450 million," said Suko.

PT Chevron Pacific Indonesia (CPI)

    This project was built to maintain the resilience of energy production after transferring the management of the Rokan Hulu Block from PT Chevron Pacific Indonesia (CPI) in 2021.

"The PGN group as Pertamina's Subholding Gas is committed to being part of the solution for national energy fulfillment. With our competence in developing oil and gas infrastructure and distributing energy both natural gas to all sectors, we strive to improve the effectiveness and efficiency of all energy supply chains. In addition, the implementation of investment operations is always aimed at moving the wheels of the regional and national economy, especially in a very challenging period during the current pandemic economic recovery, "said Suko.

Investor Daily, Page-10, Monday, Oct 19, 2020

Kadin Connects Oil and Gas Business Entrepreneurs with Shell

    The East Java Chamber of Commerce and Industry (Kadin) continues to strive to revive the economy of East Java, one of which is by opening up opportunities for entrepreneurs to invest in the oil and gas sector with Shell Indonesia. Previously, the East Java Chamber of Commerce and Industry has also been bridging entrepreneurs in East Java to partner with Pertamina Lubricant.

The East Java Chamber of Commerce and Industry (Kadin)

    East Java Kadin Chairman Adik Dwi Putranto said that although currently, it is still in a pandemic condition, the potential for the oil and gas business is still very attractive and potential. This is because the movement of people and goods is still necessary to maintain the stability of the economy and the country as a whole.

Shell Indonesia

"At the start of the pandemic, the oil and gas business also dropped dramatically due to the implementation of the Large-Scale Sausage Restriction (PSBB) policy in a number of regions. However, currently, it has increased and in East Java, it is close to normal. For this reason, we are very interested in Shell's desire to open up opportunities to do business in oil and gas. Because in these conditions any business opportunity must be tried. This is what is needed and there are already some friends who are thinking about expanding or shifting to other businesses. The East Java Kadin encourages entrepreneurs in East Java to seize these opportunities, "said Adik Dwi Putranto during the East Java Kadin Talk with the theme" The potential of the energy business in the new normal era.

    According to him, these opportunities become more attractive when entrepreneurs find it easy to do business.

"This is the concern of the East Java Chamber of Commerce and Industry. We will try to guard these opportunities into reality. Because there are actually many opportunities but there are also many obstacles, for example in terms of licensing, "he said.

Bhirawa, Page-10, Monday, Oct 19, 2020

Bekasi Oil and Gas Company was Sued

YAR Law Firm Attorneys at Law as the attorney for Foster Oil & Energy Pte Ltd (plaintiff) filed a lawsuit of default against the Bekasi City Oil and Gas Company (defendant) at the Bekasi District Court with registration number 418 / Pdt.G / 2020 / PN.Bks dated 29 September 2020. In the press release received by Media Indonesia, there are several points of concern.

First, the plaintiff and defendant made and agreed on a joint operating agreement for the management of Jatinegara Field on January 13, 2011, which was amended three times. Therefore, both the memorandum of understanding and the joint operation agreement, including the amendments, must be obeyed by the parties.

Second, the defendant did not comply with the contents of the joint operating agreement, including the amendments, but through its main director took several extreme actions, in the form of terminating or canceling it unilaterally which was only submitted through Letter Number 049 / B / PD.MGS / IX / 2020 dated 21 September 2020 regarding JOA Cancellation and Letter Number 088 / SRR & Partners / 09/2020 dated September 22, 2020.

In addition to the defendant's unilateral action, the defendant arbitrarily dismissed the existing KSO general manager and appointed himself as the Acting Officer of the General Manager KSO PT Pertamina EP - PD Migas Bekasi City/defendant as contained in PD Migas Letter Number 054 / B / PD.MGS / IX / 2020 regarding the Termination of GM KSO dated 22 September 2020 and PD Migas Letter Number 055 / B / PD.MGS / IX / 2020 regarding Announcement dated 22 September 2020.

In fact, it is clear that it has been stipulated in the joint operation agreement including the amendments that it is not permissible to terminate the existing agreement unilaterally and the replacement of the general manager of the KSO in implementing the KSO as the head of the operational team is actually the agreement between the plaintiff and the defendant.

Third, the defendant's actions did not create security and comfort for companies that invested their business capital in Indonesia in the case of Foster Oil and Energy Pte Ltd because the legal interests were not guaranteed, which was an important thing the investment company was willing to invest in Indonesia.

Previously, VP legal & Relations Pertamina EP Cholid said that his party was not aware of the report of the Indonesian Corruption Eradication Society Coalition (Kompak) to the Corruption Eradication Commission (KPK) regarding alleged corruption committed by Foster Oil & Energy, a company originating from Singapore that helped management. Jatinegara Oil and Gas Field, Bekasi, West Java. Even so, he emphasized that Pertamina EP will investigate the allegations until they are finished.

Media Indonesia, Page-4, Thursday, Oct 15, 2020