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Friday, April 16, 2021

Chevron Electric Tenders Too High


    PT PLN (Persero) asked Chevron to conduct an open tender for the Rokan Block electric generator, including by not setting an auction value of US $ 300 million because it was considered too high.

the Rokan Block

    Director of Commerce and Customer Management of PLN, Bob Saril, said that the business to business process related to the auction of the 300 megawatt (MW) power plant must be based on justice. According to him, the price set by Chevron is too high, so the pricing for the assets must be based on a fair assessment.

"The purchase value alone was US $ 190 million 20 years ago. We want to sell US $ 300 million, ”he said in the webinar on Safeguarding State Assets and the Sustainability of Electricity Supply in the Rokan Block.

the Rokan Block Working Area

    Bob also regretted that Chevron's move to hold the tender in the United States had prevented the process from being open. PLN is working with a number of related institutions to calculate the fair value of the asset which Chevron owns 95% of its shares.

“The tender process must be carried out fairly, but it seems that the tender process is not open. Intentionally covered up to find the highest value "he said.

    According to him, in the authority to supply electricity in the Rokan Block, PLN refers to the Minister of Energy and Mineral Resources Regulation No. 28 of 2021 and the Minister of Energy and Mineral Resources Regulation No. 30 of 2018. The Rokan Block area is part of the PLN electricity sales business area. For this reason, the supply of electricity and steam in the Rokan Block must be handed over to PLN as the party responsible for generating electricity. Other business entities can support PLN for other supporting services in carrying out these national duties.

PT PLN (Persero)

"For PLN, electrifying the Rokan Block is not about profit but by carrying out national duties," he said.

    On the other hand, PT Pertamina (Persero) will also prepare options if the acquisition process for Chevron's power plant in the Rokan Block cannot be completed during the transition period of management transfer.

    Pertamina's Upstream Subholding Director of Strategic Planning and Business Development John Simamora said that his party had partnered with PLN by signing a memorandum of understanding between the two parties to ensure the supply of electricity in the Rokan Block. 

    However, if the process of acquiring Chevron's power plant which is operated by PT Mandau Cipta Tenaga Nusantara has not been completed by the time of transfer of management on August 9, 2021, Pertamina must take steps so that the production process is not disrupted.

"We prioritize production, so the best step is if the latest PLN data cannot be taken over on August 9, we will of course mirror the contract until PLN succeeds in completing the process that is currently happening," he said.

    With regard to the selling price of electricity, John said that the tariff that PLN will apply will not be much different from the current price. In fact, it is possible that PLN's price will be more competitive.

"Because it could be that the actual costs so far shouldn't have been that much."

Blogger Agus Purnomo in SKK Migas

    Seeing the problems in the Rokan Block, Deputy Head of SKK Migas Fatar Yani Abdurahman said the main priority during the transfer of management of the block was to maintain production. 

    According to him, the acquisition process takes a long time because it could be a year to two years. For this reason, there are a number of options so that the demand for electricity and steam in the Rokan Block can be guaranteed during the operator shift period.

    Several viable options include mirroring contracts or forming a consortium with the old operator. Apart from that, the state could also ask for these assets to be transferred to PT Pertamina Hulu Rokan (PHR) or a regionally owned business entity.

    Furthermore, Fatar added that as of March 2021, out of the target of drilling 192 wells included in Chevron's investment, the realization had reached 28 wells. Meanwhile, for the workover activities of the target of 10 activities, 3 workovers have been realized. Reflecting on the process of transferring management of the Mahakam Block, SKK Migas prepares anticipatory steps to maintain production rates in the Rokan Block.

    In this regard, SKK Migas Operations Deputy Julius Wiratno said that his party would be quicker to start drilling activities so that they could reduce the rate of decline in production when the confusion shifted to PT Pertamina Hulu Rokan (PHR). Development drilling is also ongoing in addition to the use of Enhanced Oil Recovery (EOR).

Bisnis Indonesia, Page-3, Friday,  April 9, 2021

1 comment:

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