PLN Optimistic to Win MCTN Majority Share Auction Worth US$ 300 Million

    PT PLN (Persero) is optimistic that it will win the auction of PT Mandau Cipta Tenaga Nusantara (MCTN) shares which are offered at a price of US$ 300 million. MCTN is the operator of the North Duri Cogen (NDC) Gas Power Plant (PLTG) which supplies electricity and steam to support oil production in the Rokan Block. This acquisition follows the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan (PHR).

PT Chevron Pacific Indonesia (CPI)

    PLN's Director of Commerce and Customer Management Bob Saril said that the process of acquiring a 95% stake in MCTN of PT Chevron Standard Limited (CSL) in MCTN is still in the negotiation process. However, his party has reached an agreement regarding the sound of the articles in the conditional sales purchase agreement (CSPA). Winners will be announced this week.

"We are coordinating the negotiations, hopefully in the not too distant future we will close, we will get PLN's 100% MCTN shares," he said in a statement.

discussion of Power Supply Reliability Keeps Rokan Block Production.

    He explained, because it is the acquisition of share ownership, later MCTN will become a subsidiary of PLN. This means that there will be no change in operator from PLTG NDC so that it will continue to operate normally when there is a transfer of management of the Rokan Block to Pertamina in August. 

the Rokan Block Chevron

    After the announcement of the winner of the stock auction, there will be a grace period of one month. However, it is certain that the acquisition of MCTN shares can be completed before the transfer of management of the Rokan Block takes place.

“From August 8 to August 9 [MCTN] will take place as usual. A week or even before that, the share shares have been taken by [PLN], as well as the business license has been referred to PLN, “said Bob.

PT Pertamina Hulu Rokan (PHR)

    He hopes that the government can provide support related to the required permits. As for the other two power plants, namely PLTG Minas and Central Duri, he said that PT Pertamina Hulu Rokan (PHR) will still be managed in the next year. After that, his party hopes that these two power plants can also enter the PLN system so that they can be renewed. PLTG NDC will also be updated by his party.

"So this 400 MW can be managed by PLN," he said.

    For the long term, his party will supply electricity to the Rokan Block from the Sumatra Electricity System. This will make the electricity supply more reliable and efficient than if only relying on PLTG. Moreover, the electricity reserve (reserve margin) of the Sumatra System has reached 35-40%. 

    The Rokan Block's electricity supply will come from three sources, namely from the New Garuda Sakti Transmission-Balai Pungut 290 MW, the Duri Transmission-Balai Pungut 240 MW, and the Balai Pungut Generator 250 MW. In addition, PLN will equip it with high-voltage (TT) compensator facilities and a 5x100 MW converter. All of these facilities will be operational within the next three years in 2024.

"So if a power plant goes out of the system or is under maintenance, the electricity supply remains as it is," explained Bob.

    In addition to the electricity supply, Bob also emphasized that his party will guarantee the supply of steam to the Rokan Block. His party will supply the steam needs of 335 thousand barrels of steam per day/ BSPD using a new steam generator which is also targeted to operate in the next three years. 

    PT Pertamina Hulu Rokan (PHR) Business Support Project Leader Danang Ruslan Saleh said the Rokan Block operation requires a supply of 400 MW and 335,000 BSPD of steam. Around 270 MW or 60-70% of electricity supply so far comes from PLTG NDC. Likewise, the steam supply of 70 thousand BSPD or 70-80% of the total demand also comes from this facility. The continuity of this supply will determine the Rokan Block's oil production.

"But we are now with a Production Sharing Contract / PSC gross split, so we are required to be very efficient, including in the supply of electricity, steam, and gas," he said.

    Pertamina is said to be committed to continuing to boost oil production in the Rokan Block. A number of programs have been prepared by his parties, such as infill drilling and water floods. So that, in the future, the Rokan Block can still be the main contributor to national oil production.

"We are working massively and aggressively to increase the Rokan Block's oil production," said Danang.

    PLN and PT Pertamina Hulu Rokan (PHR) have also signed the Electricity and Steam Sales and Purchase Agreement (SPJBTLU) on February 1, 2021. This SPJBTLU will come into effect in August 2021.

Investor Daily, Page-10, Wednesday, June 23, 2021

PLN is getting more and more sure to enter the Rokan Block

    The certainty of PT PLN (Persero) to become the electricity supplier in the Rokan Block after the transfer of management process is increasingly clear. The state-owned company is currently in the final stages of negotiating the acquisition of a gas-fired power plant owned by PT Mandau Cipta Tenaga Nusantara (MCTN).

PT PLN (Persero)

    Director of Commerce and Customer Management at PLN Bob Saril said that the company had reached an agreement regarding the provisions in the Conditional Share Purchase Agreement (CSPA) to purchase shares of the North Duri Cogen MCTN 300 MW Steam Power Plant (PLTGU), which is 95% owned by Chevron Standard Limited ( CSL), an affiliate of PT Chevron Pacific Indonesia (CPI). It is hoped that shortly, PLN will be able to own 100% of PT Mandau Cipta Tenaga Nusantara (MCTN) shares.

Chevron 

“Now we are in the process of negotiating with Chevron Standard Limited (CSL) directly. This morning we have succeeded in reaching agreements with several articles of the CSPA and later there will be a share purchasing agreement that we can sign in a short time, not too long,” said Bob.

    Meanwhile, communication regarding the acquisition of Chevron Standard Limited (CSL) shares in MCTN by PLN has been carried out since November 2020. Based on the explanation given by Bob, PLN targets the acquisition process to be completed by the end of June 2021. He stated that in the process of acquiring this share, the company was assisted by experienced consultants.

“If you look at the scheme for their auction process or selling these shares, they will announce it this week. Then, they have 1 month to wait if there is a question from outside. After that we signed it,” said Bob.

    He also guaranteed that the acquisition of the power plant owned by MCTN would not disrupt the electricity supply in the Rokan Block. PLN will utilize the 300 MW North Duri Cogen MCTN PLTGU to provide electricity services to the Rokan Block during the transition period.

the Rokan Block Chevron

"We don't have to worry about whether during the transition there will be electricity supply disruptions and so on. The shares were taken over by PLN, including the employees who automatically become part of PLN," he said.

    Thus, Bob ensures that the process of transferring the management of the MCTN power plant will run smoothly.

“On August 8 to 9, [the electricity supply] will automatically start as usual because before that, maybe a week earlier, the shares had been taken over. Likewise, the next follow-up is that business permits have been submitted to PLN, we have no more problems,” said Bob.

PT Pertamina Hulu Rokan (PHR)

    Meanwhile, PLN has signed a Sales and Purchase Agreement for Electricity and Steam (SPJBTLU) with PT Pertamina Hulu Rokan (PHR) for the Rokan Block in February which will be effective at the end of the Rokan Block management by CPI in August 2021.

    The PLN electricity supply service period is divided into two, namely a transition period of only 3 years starting from August 2021 to August 2024 and permanent services will be provided starting August 8, 2024.

    During the transitional service period, PLN will utilize the PLTG North Duri Cogen MCTN, while permanent services are carried out by interconnecting the electricity system in the Rokan Block with the Sumatra electricity system.

    Meanwhile, President Director of PT Pertamina Hulu Rokan (PHR) Jaffee Arizon Suardin said that the availability and reliability of electricity and steam supply were very important to support efforts to increase production in the Rokan Block.

"We are very happy that last February we signed a cooperation agreement on the sale and purchase of electricity and steam with PLN, so hopefully we can continue to carry out this cooperation," said Jaffee.

    PHR Business Support Project Leader Danang Saleh added that the Rokan Block is one of the backbones of national oil production which contributes around 170 Mbopd or 24% of national oil production. Therefore, its management requires the support of reliable electricity and steam supplies with a demand of 400 MW and 335 Mbspd of steam.

    Meanwhile, the Rokan Block's electricity needs are currently supplied by MCTN's 300 MW NDC plant and supported by PLTG Minas and Central Duri 130 MW which are managed by PT Pertamina Hulu Rokan (PHR) through a third party.

“Approximately 60%-70% of this NDC plant will supply 270 MW of what we need a total of 400 MW. So is the steam. This is a large portion, so there is a great hope that the provision of electricity and steam from PLN can be realized properly," said Danang.

CONTINUOUS PRODUCTION

    Professor of the Faculty of Engineering, University of Indonesia Iwa Garniwa said that the electricity sector in the Rokan Block became an important issue because it involved the sustainability of oil production in the Rokan Block. Therefore, the control of existing power plants, either through the purchase of power plants or through a power purchase contract, is key.

"If this existing power plant is not controlled by [PLN], then the Rokan Block will be very difficult," said Iwa.

    Meanwhile, PLN takes approximately 3 years to build a transmission from the Sumatra system to meet the electricity needs of the Rokan Block in the long term. Therefore, until the transmission is built, whether or not PLN will have to use the existing power plants.

    He also recommended that PLN conduct an audit of electrical installations starting from generation, transmission, and distribution to know the condition of existing power plants, including the BPP.

"The conditions of the generator, transmission, and distribution have met the requirements, but whatever the new owner must be, the supply constraints will be met because this is related to the products that will be made by Pertamina," he said.

    Energy Watch Executive Director Mamit Setiawan hopes that the negotiation process carried out by PLN in acquiring the MCTN power plant can be mutually beneficial and will not burden PLN's finances later.

"Don't let PLN make too big a sacrifice in the sense of buying too large shares and eventually burdening PLN's finances. If you buy expensive, while PLN already has SPJBTLU with PT Pertamina Hulu Rokan (PHR), then PLN will lose. The price with this PT Pertamina Hulu Rokan (PHR), of course, has been kept, "said Mamit.

Blogger Agus Purnomo in SKK Migas

    Regarding the Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Julius Wiratno explained that the progress of the transition process for Rokan's work area is still ongoing according to the target.

"One of the priorities is to conduct development drilling to increase production, of which 73 wells have been drilled and have increased production," he said.

    Julius added that Chevron is trying to increase the number of rigs and long-lead items needed for well drilling activities in the Rokan Block to curb the decline in production during the transition period.

Bisnis Indonesia, Page-4, Wednesday, June 23, 2021

73 Wells Have Been Drilled

    Less than 2 months before the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan (PHR), a total of 73 wells have been drilled during the transition period.

Blogger Agus Purnomo in SKK Migas

    Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Julius Wiratno explained that the progress of the transition process for Rokan's work area was still progressing according to the target.

"One of the priorities is to carry out development drilling to increase production, which currently has reached 73 wells that have been drilled and increase production," he said.

Chevron

    Julius added that Chevron is trying to increase the number of rigs and long-lead items needed for well drilling activities in the Rokan Block to curb the decline in production during the transition period.

 

the Rokan Block 

    He also stated that all preparations from PT Pertamina Hulu Rokan (PHR) had been carried out. Thus, Pertamina is ready to carry out the transfer of management on August 9, 2021.

"Many programs such as the procurement of additional drilling rigs and offering employment are already around 100% completed," he explained.

PT Pertamina Hulu Rokan (PHR)

    Previously, President Director of PT Pertamina Hulu Rokan (PHR) Jaffee A. Suardin said that one of the activities currently underway is the mirroring process for existing contracts which has reached 95% or 276 contracts out of 290 contracts.

"The process of procuring goods and services at PHR for the Rokan block is carried out by several methods, namely mirroring for existing contracts at PT Chevron Pacific Indonesia (CPI) and new procurement for contracts that are not yet in PT Chevron Pacific Indonesia (CPI) or mirroring cannot be done," he said.

PT Chevron Pacific Indonesia (CPI)

    Apart from mirroring existing contracts and new procurements, there are also contracts through the Local Business Development (LBD) program. Currently, there are 260 LBD contracts that will be processed separately involving around 690 LBD partners. LBD phase 1 socialization was carried out at the end of last May and it is hoped that in the 3rd or 4th week of June the contract can be realized.

"PT Pertamina Hulu Rokan (PHR) will also evaluate opportunities to expand the involvement of the surrounding community by involving Village-Owned Enterprises (BUMdes)," he said.

Bisnis Indonesia, Page-4, Tuesday, June 22, 2021

Maintain Production of Rokan Block Pertamina Agrees on 65 BBTUD Gas Supply

    PT Pertamina Hulu Rokan (PHR), a subsidiary of PT Pertamina Hulu Energi, signed two memorandums of understanding/MoU on gas supply of 65 billion British thermal units per day/BBTUD for the Rokan Block. The gas supply will be used in operations to maintain the production stability of the block.

The Tokan Block By Chevron

    The first MoU signed was with PetroChina International Jabung Ltd (PIJL) for gas supply for steam flood operations in the Rokan Block of 50 BBTUD, estimated to start flowing in 2023. The steam flood operation is an enhanced oil recovery/EOR activity for oil production in the Duri Field, Rokan Block.

Repsol 

    The second agreement with Repsol Sakakemang BV is 15 BBTUD. This supply is to fulfill gas needs for the operational needs of the Rokan Block after the handover of operations from PT Chevron Pacific Indonesia (CPI) on August 9, 2021.

PT Chevron Pacific Indonesia (CPI)

    Regarding the MoU with Repsol, Pertamina Hulu Energi President Director Budiman Parhusip said it would be valid for two years. This agreement will be the basis to conduct discussions and studies on the possibility of utilizing the potential supply of gas from the Sakakemang Block to fulfill gas needs in the Rokan Block.

"This gas sale and purchase activity can be carried out after PHR and Repsol Sakakemang BV have obtained an approval letter for gas allocation from the Government of the Republic of Indonesia," said Budiman.

PetroChina

    The same applies to the MoU with PetroChina Jabung. President Director of PT Pertamina Hulu Energi Jabung Taufik Adityawarman said that the gas supply would be used starting February 27, 2023, and was valid for one year. However, the realization of this gas supply is still waiting for the government's decision regarding the production sharing contract/PSC of the Jabung Block which ends on February 26, 2023.

"But that was after the seller signed the new Jabung Block cooperation contract with the Government of the Republic of Indonesia," explained Taufik.

    At the same time, the process of managing the Rokan Block continues. One of them is the existing contract mirroring process, which currently has reached 95% or 276 contracts out of a total of 290 contracts.

"The process of procuring goods and services at PHR for the Rokan block is carried out using several methods, namely mirroring for existing contracts at CPI and new procurement for contracts that do not yet exist in CPI or mirroring," said Pertamina Hulu President Director Rokan Jaffee. A Suardin.

    In addition, the procurement of PT Pertamina Hulu Rokan (PHR) is also through the Local Business Development (LBD) program. Currently, 260 LBD contracts will be processed separately involving around 690 LBD partners. The first stage of LBD socialization was carried out at the end of May and is in the process of contracting for the remainder of this month. PHR continues to seek to expand the involvement of the surrounding community.

Investor Daily, Page-9, Saturday, June 19, 2021

VLGC Pertamina Gas 2 Raises Red and White in the United States

    The very large gas carrier (VLGC) Pertamina Gas 2 (PG 2) operated by PT Pertamina International Shipping (PIS) has made a new history for being an Indonesian-flagged vessel that can be docked at the American LPG terminal. This ship made its maiden voyage to transport LPG cargo from the Americas with a FOB base at the LPG Export Terminal owned by Phillips 66 in Freeport, Texas.

Phillips 66 in Freeport, Texas

    The very large gas carrier (VLGC) Pertamina Gas 2 (PG 2) began sailing from Indonesia on 27 April 2021 and arrived in Houston, the United States on 5 June 2021. Transporting a total of 45,000 MT LPG belonging to Subholding Commercial and Trading, the PG 2 vessel was commanded by Capt. Dasuki with a crew of 27 people, of which 60% are under 40 years old.

 The very large gas carrier (VLGC) Pertamina Gas 2 (PG 2)

    This ship will travel more than 28,000 nautical miles with more than 80 round trip days, from Indonesia to the United States, then back to Indonesia. According to Capt. Dasuki, the journey through 3 continents and 2 oceans is a challenge in itself, considering that the PG 2 ship must pass US government certification. Certificate of Compliance Examination is a certificate of recognition from the US government for PG 2 Ships that have met the rules and requirements.

"I am certainly very happy because the issuance of this certificate shows that Pertamina Gas 2 can carry out all activities, especially in US waters," he said.

    PT Pertamina International Shipping (PIS), which is currently Pertamina's sub-holding shipping company, can manage Indonesian-flagged vessels docked at international ports. It is a matter of pride for PT Pertamina International Shipping (PIS) where the PG 2 ship's journey this time is manned by all Indonesian crew members and fulfills the requirements of the Classification Society / Indonesian Classification Board (BKI).

"Hopefully this achievement will be the first step and build confidence to spread its wings in the global shipping industry," said Capt. Dasuki.

    PG 2 was built under the Panamanian and LR class flags during the construction period, but over time, reflagging was carried out to the Indonesian flag to support Indonesian flag vessels from the gray list to the White list and now PG 2 is under the BV and BKI classes. The ship made by the Hyundai-South Korea company in 2014 made a voyage to carry LPG as a supply for Indonesia's national energy needs.

    The PG 2 ship is capable of sailing 20,000 nautical miles (1 NM = 1,852 Km) without refueling at a speed of 16.8 knots. The special design prepared by PIS is with a flexible cargo manifold arrangement cargo handling LVVL (Liquid-Vapor Vapor Liquid) or VLLV (Vapor Liquid Liquid-Vapor).

Investor Daily, Page-10, Wednesday, June 16, 2021

Cepu Block Oil Production Reaches 475 Million Barrels

    Cepu Block production managed by Exxon Mobil Cepu Limited (EMCL)  has reached 475 million barrels, exceeding the target in the plan of development/POD of 450 million barrels. The government encourages the development of oil and gas potential in this block so that production does not decrease significantly.

Exxon Mobil Cepu Limited (EMCL)

    The achievement of cumulative production of 475 million barrels is marked by the 700th shipment of oil lifting from the Cepu Block at the floating storage and offloading/FSO tanker ship Gagak Rimang. The volume of oil lifted is 1 million barrels, namely 850 thousand barrels belonging to the government and 150 thousand belonging to the Cepu Block Participating Interest Cooperation Agency (BKS PI). The shipment was led and witnessed directly by the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif.

Exxon Mobil Cepu Limited (EMCL)

    Arifin said that Exxon Mobil Cepu Limited (EMCL) had previously succeeded in increasing the Cepu Block reserves from the initial 450 million barrels to 940 thousand million barrels. Even from the production level, the oil and gas company originating from the United States was also able to reach more than 200 thousand barrels per day (BPD) from the initial around 160 thousand BPD in 2016. He hopes that Exxon Mobil Cepu Limited (EMCL) can maintain its performance.

"We hope that this capability can continue to be developed to optimize oil and gas production in Indonesia," said Arifin Tasrif. One of them, Exxon Mobil Cepu Limited (EMCL), and partners are expected to continue to develop the oil and gas potentials around the Cepu Block area.

"We hope that the existing potentials can be developed immediately so that they can be used as reserves so that the production process can then be carried out," he said.

Bloger Agus Purnomo in SKK Migas

    Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto added that the Cepu Block had reached a plateau production level with a volume of more than 220 thousand BPD for five years. This realization far exceeds POD with an estimated average production of 165 thousand BPD over two years. 

the Cepu Block by ExxonMobil

    However, as is normal for other oil and gas reservoirs, the Cepu Block production is now starting to decline. However, his party together with Exxon Mobil Cepu Limited (EMCL) continues to strive to maintain Cepu Block's oil production so that it does not drop drastically. 

"Currently SKK Migas continues to oversee Exxon Mobil Cepu Limited (EMCL) with Cepu Block partners to discuss various initiatives to manage the production decline that has begun to occur, including exploring new opportunities in the Cepu Block," said Dwi.

    According to him, there are additional reserves that are ready to be produced of up to 40 million barrels. "In the near term the potential that can be monetized is 40 million barrels, but infill drilling must first be carried out," he said.

    In addition, there is an opportunity to increase the production of the Kedung Keris Field from 10 thousand BPD to 11 thousand BPD. However, exploration drilling is needed to ensure the potential in Kedung Keris. Not only oil, but his party also encourages the monetization of gas potential in the Cepu Block area. 

    This is because the potential for gas reserves in the Cendana and Alas Tua fields is recorded to be very large, around 200 billion cubic feet/BCF with an estimated production of 83 million standard cubic feet per day/MMscfd. Then there is gas potential from several field structures in the Cepu Block, such as Giyanti and Pilang, the amount of which can reach 500 BCF. 

“Gas potential in the future. We hope that Mobil Cepu Limited (EMCL) and Pertamina can optimize this opportunity," he said.

Irtiza Sayyed

    ExxonMobil Indonesia President Irtiza Sayyed said that discussions on opportunities to monetize the potential that still existed in the Cepu block had been carried out intensively. One of the discussions is to ensure the potential reserves of 40 million barrels of oil that are ready to be produced.

"We will do whatever it takes to maximize production and curb production declines," he said.

Nicke Widyawati

    As a partner, President Director of PT Pertamina (Persero) Nicke Widyawati stated that she would fully support efforts to keep Cepu Block production stable.

PT Pertamina (Persero)

"We hope that in the future, the good and solid cooperation that has been carried out so far can be maintained and even increased, given the production level which is estimated to be stable at the level of 200 thousand BPD, so that it can support national energy security," She said.

    Referring to SKK Migas data, this year, the Cepu Block is targeted to produce 219 thousand BPD of oil. Meanwhile, the realization of production as of March 31, was still at 213,251 BPD or 97.4% of the target. 

    In 2020, the realization of Cepu Block production was recorded at 218,194 BPD. Oil production activities at the Banyu Urip Field, Cepu Block have been carried out since 2008 and the main production facilities began operating in the fourth quarter of 2015.

Investor Daily, Page-10, Thursday, June 10, 2021

Merakes Project Ready to Supply Domestic Gas

    Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif inaugurated the Merakes Field oil and gas development project in the East Sepinggan Working Area, East Kalimantan. The investment value of the project reaches US$ 1.3 billion or Rp 18.5 trillion. The project, which is operated by ENI East Sepinggan Ltd, has started onstream in April 2021 and will deliver gas of 368 million standard cubic feet per day (MMSCFD) at peak production.

ENI

"With the completion of one of the major oil and gas projects, namely the development of the Merakes field, it is hoped that the production and utilization of natural gas in Indonesia" will increase," said Arifin.

the Merakes Field by ENI

    Production from the Merakes Field will contribute to the extension of the operating life of the PT Badak Natural Gas Liquefaction (NGL) gas refinery in Bontang, East Kalimantan. Near the Merakes Field location, the Floating Production Unit/FPU is also distributed through gas pipelines for domestic needs of 117 MMSCFD from 2022 - 2025.

"The government continues to encourage efforts to increase reserves, oil and gas production, and optimize the use of natural gas for domestic needs, which currently stands at 63.9%," said Arifin.

    The share of natural gas in the current national energy mix should be 19%. Based on Government Regulation No. 79 of 2014 concerning National Energy Policy, this portion is targeted to be 22% by 2025.

"To achieve this target, there are obstacles such as the decline in oil and gas production caused by old oil and gas fields, no new large reserves being found, and the lack of exploration. Therefore, we will continue to boost the fulfillment of domestic gas," said the Minister of Energy and Mineral Resources.

Blogger Agus Purnomo in SKK Migas

    On the same occasion, Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said that this project was previously targeted to be onstream in the third quarter of 2020. However, due to the COVID-19 pandemic, it was postponed to April 27, 2021. 

    He said the Merakes natural gas project will help meet the supply of piped gas needs in East Kalimantan as well as the need for liquefied natural ga domestic and export. The Merakes Field was developed with an investment of US$ 1.6 billion.

Media Indonesia, Page-10, Wednesday, June 9, 2021

Cepu Block Backup Optimized

    The government is targeting the potential reserves that are still available in the Cepu Block to prevent a natural decline in production in the working area which is the buffer for national oil production. The Cepu working area, which is operated by ExxonMobil Cepu Limited (EMCL), has recorded crude oil production of 475 million barrels.

ExxonMobil Cepu Limited (EMCL)

    Meanwhile, this production is higher than the estimated total volume of oil reserves produced based on the initial plan of development/POD of 450 million barrels.

the Cepu Block East Java by ExxonMobil Cepu Limited (EMCL)

    Minister of Energy and Mineral Resources Arifin Tasrif said the contribution from the Cepu Block was very large to the achievement of ready-to-sale production or national lifting reaching 30-40 percent. Unfortunately, the water content in the Cepu Block drilling has now increased which indicates a decline in production from the Cepu Block.

"There is another potential of 40 million barrels that must be exploited from around Cepu," he said.

    Arifin hopes that ExxonMobil can optimize oil and gas resources in the Cepu Block and immediately develop existing reserves to be processed into production. According to him, with the total production of the Cepu Block which has reached 475 million barrels, there are still almost half of them, namely 940 million barrels.

"ExxonMobil will take steps, among others optimizing the work in the well to be maintained, then subsurface works will be carried out, more intense programs and also prevent downtime," he said.

Blogger Agus Purnomo in SKK Migas

    Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said the decline in production in the Cepu Block was indeed due to an increase in the portion of water that came out of oil drilling and an increase in the gas ratio. 

    On the other hand, the Banyu Urip Field is currently at a stable production level at around 220,000 barrels per day. However, with production levels higher than the initial estimate, the Banyu Urip Field also experienced a scientific decline in production.

"Currently SKK Migas continues to oversee ExxonMobil Cepu Limited (EMCL) together with partners to discuss various initiatives to manage the decline in production that has begun to occur," he said.

Nicke Widyawati

    Meanwhile, PT Pertamina (Persero) said it would take part in increasing production in the Cepu Block. Pertamina President Director Nicke Widyawati said the increase in production in the Cepu Block would be pursued through the completion of the Jambaran-Tiung Biru (JTB) project which is being worked on by PT Pertamina EP Cepu (PEPC).

the Jambaran-Tiung Biru (JTB)

"Pertamina is committed to increasing additional production in the block because we realize that in the energy transition plan, the use of gas will be a transition from fuel to NRE," said Nicke Widyawati.

    The project with a total investment value of US$ 1.53 billion is projected to have a peak gas production of 192 MMscfd. The JTB project is said to provide a multiplier effect in providing gas supply for various industrial sectors in Central and East Java. 

    Based on SKK Migas data, in the first quarter of 2021 the progress of project work has reached 88.77%. The realization was still below the target of 98.22%.

    Meanwhile, ExxonMobil Cepu Limited (EMCL) crude oil production in the first three months of this year was recorded at 213,251 barrels per day or only 97.4% of the APBN target of 219,000 bopd.

GOVERNMENT APPRECIATION

    Meanwhile, the government will provide awards for upstream oil and gas contractors who have good performance. Arifin said the Ministry of Energy and Mineral Resources has sent a letter to the Ministry of Finance regarding the plan to provide incentives for existing upstream oil and gas contracts.

    According to Arifin, the provision of incentives is to increase the interest of the cooperation contract contractors to increase their production, especially for old wells.

"Those who work hard and produce good results will be rewarded in the form of incentives," he said.

    Arifin continued that wells that had been exploited for a long time had reduced reserves. It takes a lot of effort to at least maintain production levels and maintain the economy of the field.

"If production can increase, the government's share will also increase," he said.

    In addition to incentives for existing contractors, the government will also provide incentives to attract new investors. The challenge is that international oil and gas companies have a tendency to shift their investment costs to NRE.

    The government seeks to attract investors by providing attractive fiscal policies supported by the provision of data and simplification of licensing.

“Indonesia is one of the most attractive locations in the world for investment in the upstream oil and gas sector. For that, we must be able to open an attractive 'showroom' to be visited," said Arifin.

    Dwi Soetjipto assessed that the incentives to be given would depend on the economic value of the business in the field. In addition, incentives also need to refer to the applicable regulations. Dwi Soetjipto said SKK Migas would review a number of aspects to be able to provide these incentives.

"We'll see which one is the best for the country to increase investment," he said.

    On another development, the government is encouraging the development of methane hydrate as an alternative energy source with low emissions. Methane hydrate gas is believed to be one of the unconventional energy innovations that can substitute the use of conventional oil and natural gas.

    Based on research in 2004, it has been found potential reserves of methane hydrate as much as 850 trillion cubic feet in the offshore area of ​​southern Sumatra to the northwest of Java and in the Makassar Strait, Sulawesi.

    This amount is about eight times the current natural gas reserves so that it can support national energy security for up to 800 years. With the support of further research, the volume of methane hydrate gas reserves in Indonesia is estimated to reach 3,000 TCF.

Bisnis Indonesia, Page-4, Thursday, June 10, 2021

Chevron Workers Immediately Change Status to Pertamina Officers

 

    Ahead of the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) to Pertamina Hulu Rokan (PHR) on August 9, 2021, Pertamina welcomes CPI workers who will change status to Pertamina employees or commonly called Pertamina Officers.

PT Chevron Pacific Indonesia (CPI)

"I welcome the 2,757 employees of Chevron Pacific Indonesia, prospective Pertamina Group employees," said PT Pertamina (Persero) President Director Nicke Widyawati in an online discussion in the form of a Townhall Meeting with all CPI employees.

“The proverb says 'You don't know it, you don't love it, for that today there was a brief introduction from Pertamina regarding Corporate Overview, Subholding Upstream Overview, PHR Overview, and Human Capital Aspects so that fellow workers who will become the Pertamina Group's extended family will get to know Pertamina closer,” said Nicke Widyawati.

Nicke Widyawati

    According to Nicke, the transfer of management to Pertamina as a national company will provide wider benefits for the state both in terms of management and management state revenue and strengthen Pertamina's position as one of the locomotives of development and the national economy.

"We also have a mandate and a noble task where we have a target to be able to produce 1 million barrels of oil and gas by 2030, for that we need commitment and dedication from all elements of workers, especially the Upstream Subholding to be able to realize this goal," concluded Nicke.

    President Director of PT Pertamina Hulu Energi as Upstream Subholding Budiman Parhusip explained that later the Rokan Block will be managed by PHR under the auspices of PT Pertamina Hulu Energi as Upstream Subholding. Currently, PHR manages Upstream Work Areas and Assets in the Sumatra Region, known as Regional 1 - Sumatra Subholding Upstream.

"With this Regionalization system, between Work Areas and Assets that are close to each other, especially Sumatra in this case, field optimization and operational development effectiveness can be carried out. So that the joining of CPI Workers will also open up more career development opportunities,” explained Budiman.

    PHR President Director Jaffee Arizon Suardin added an explanation regarding PHR, which is also Regional 1 – Sumatra in Pertamina's Upstream Subholding that PHR manages the Rokan block and manages all Pertamina blocks or work areas in Sumatra.

“The focus is that we want to grow significantly and sustainably by focusing on all the potentials that can still be developed. Business Continuity to maintain and even increase production as well as safety and reliability remain the main priority in carrying out the work. Pertamina through PHR will also ensure that the operatorship transfer runs smoothly so that we can complete the program in 2021 and grow significantly in the following years," said Jaffee.

    Regarding Human Resources, Oto Gurnita, Director of Human Resources & Business Support for Upstream Subholding, explained the basic principles of managing workers towards management transfer, especially those related to the organization, employee development transfer, and employee development, and other industrial relations related matters. 

    Managing Director of Chevron IndoAsia Business Unit and President Director of PT Chevron Pacific Indonesia (CPI) Albert Simanjuntak said that this opportunity for open discussion is a positive step for both parties.

"Through this event, we hope that CPI workers can gain a comprehensive insight into PT Pertamina (Persero), Subholding Upstream, and also specifically PT Pertamina Hulu Rokan (PHR). Human Resources is the most important asset in any company and PT Chevron Pacific Indonesia (CPI) is no exception. Integrity, professionalism, and dedication are values ​​that are proven to bring success to us. Hard work and these values ​​will continue to bring success to workers wherever they are. For that, he hopes that PT Chevron Pacific Indonesia (CPI) workers who will join PHR can make their best contribution, even during this COVID-19 pandemic, with the hope that the production of the Rokan block will achieve maximum results," said Albert.

Investor Daily, Page-10, Monday, June 7, 2021