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