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Two Oil and Gas Blocks will Get Additional Incentives

 


The government will provide additional incentives for the two oil and gas blocks to boost national oil production. This step is expected to be able to provide additional production reserves of oil of 138 million barrels and gas of 1.7 trillion cubic feet.

Blogger Agus Purnomo in SKK Migas

Deputy for Planning for the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Jaffee Arizona Suardin said the massive depletion plan (MDP) is one of the strategies to pursue the oil production target of 1 million barrels per day (bpd) by 2030.

His party is looking for oil and gas potentials that can actually be produced, but require additional incentives to be realized. This step was taken, he explained, because the government is now increasingly flexible in providing incentives for upstream oil and gas industry players. Two oil and gas blocks are candidates for this additional incentive recipient.

"We have discussed it with the government, there has been the approval of additional incentives," he said in a discussion held by the Indonesian Association of Oil and Gas and Geothermal Drilling Entrepreneurs (APMI) in Jakarta.

According to him, the potential for MDP is not only in these two oil and gas blocks. His party is also evaluating three other MDPs with the potential for additional oil and gas reserves of up to more than 200 million barrels of oil equivalent.

"Then we will maximize the oil and gas block so that it returns to its former glory. That way per year, "said Jaffee.

PT Pertamina Hulu Energi (PHE) Vice President for Drilling and Well Intervention, Anto Sunaryanto, said that the existence of MDP has encouraged his party to be more massive in producing existing oil and gas reserves. Moreover, the government is increasingly open to additional incentive options for cooperation contract contractors (KKKS), including additional profit sharing (splits).

"With a better split, we can change more reserves to production," he said.

His party has submitted additional splits to the government for several oil and gas blocks that it manages and is still waiting for an answer. If the additional split decision from the government comes out this December or January next year, it will add more operational activities to be carried out.

"It's not official yet, but I heard the incentive has been approved," said Anto.

Previously, Director of Development and Production of PT Pertamina Hulu Energi (PHE) Taufik Aditiyawarman said additional splits were proposed for the Mahakam Block and the Sanga-Sanga Block. 

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). 

    The five blocks are termination blocks managed by the company. Taufik had said that if he obtained an improvement in the profit-sharing, 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 potentials in the oil and gas block, increase reserves and future production," he said.

Pertamina signed the Production Sharing Contract / PSC for the Sanga-Sanga Block, East Kalimantan, and the OSES Block with a gross split scheme in 2018. Likewise, the Mahakam Block PSC amendment uses a cost recovery investment scheme. Meanwhile, the ONWJ Block contract was signed in 2017.

the ONWJ Block 

Referring to the contract, Pertamina's profit-sharing in the Sanga-Sanga 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.

the OSES Block

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 that Pertamina is working on 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) of the APBN-Amendment target of 25 thousand bpd and gas of 558 million standard cubic feet per day / MMScfd) of 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 of 71 MMScfd from the target of 58 MMScfd. Next, the oil lifting of the OSES Block was 26,542 bpd from the target of 24,010 bpd, East Kalimantan 9,862 bpd from a target of 11,380 bpd, and Sanga-Sanga 12,515 bpd from a target of 12,030 bpd.

Investor Daily, Page-10, Friday, Nov 13, 2020

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