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PLN DOMINATES ROKAN'S ELECTRICITY SUPPLY


    PT PLN (Persero) is preparing to control the electricity supply for the Rokan Block after signing a share purchase agreement with PT Mandau Cipta Tenaga Nusantara MCTN), which has been supplying energy for the legendary oil and gas working area.

    PLN President Director Zulkifli Zaini said that with this signing, 100% of PT Mandau Cipta Tenaga Nusantara (MCTN) shares will be owned by PLN. Meanwhile, MCTN is an electricity company owned by Chevron Standard Limited (CSL).

    Through this acquisition, PLN will utilize the gas power plant (PLTG) North Duri Cogen with a capacity of 300 megawatts (MW) previously owned by MCTN to ensure the availability of electricity and steam supply to the Rokan Block during the transition period.

"We will supply electricity and steam to the Rokan Working Area from the PLN side in two stages," he said.

The Rokan Block Chevron

    First, short-term power supply. After the acquisition of MCTN shares, the company's operations will continue for a 3 year transition period. Second, the supply of electricity for the long term. PLN will interconnect the electricity system in the Rokan Block with the Sumatra electricity system.

    PLN's Director of Commerce and Customer Management Bob Sariel said the acquisition was very important for the operation of the Rokan Block. This is done to ensure that the electricity supply does not stop after the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan on August 8, 2021.

PT Chevron Pacific Indonesia (CPI)

“If you want to build a network, it takes 2 years to replace the object or 1 year to relocate. If there is a 1.5-year time lag that causes electricity to be unable to flow to Rokan, of course, the oil Working Area in the Rokan Block will experience a decrease in production, "he said.

    In addition, the acquisition decision is also considered to be better than just entering into a power purchase contract with MCTN or renting the power plant. Moreover, MCTN is the only one that can supply electricity to the Rokan Block.

    After a 3-year transition period, the Rokan Block's electricity needs will be supplied from a more reliable Sumatran electricity system. According to Bob, Sumatra's electricity system has a very strong supply with supplies from a number of steam power plants (PLTU), hydroelectric power plants (PLTA), and geothermal power plants (PLTP) in the region. Currently, the company is building a 500 kV transmission network to strengthen Sumatra's electricity system.

    Regarding investment to support electricity supply to the Rokan Block, PLN has allocated around Rp11 trillion. However, Bob has not been able to reveal more details about the acquisition value of MCTN shares on the grounds that they are still bound by a non-disclosure agreement (NDA). 

    The contents of the MCTN share sale and purchase agreement can only be opened after the administrative and financial processes are completed approximately 1 month after the signing of the share purchase agreement. What is clear, the acquisition funds will come from internal PLN.

Jennifer Ferratt

    Regional Director of Chevron Standard Limited Jennifer Ferratt said that with the completion of the share sale and purchase process, the company is committed to creating a smooth transition in MCTN and in line with the transition of the Rokan Block to Pertamina Hulu Rokan (PHR).

"We would like to thank PLN for working with CSL to achieve fair and mutually beneficial results," said Jennifer.

    Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif added that the Rokan Block has huge potential for oil reserves. Therefore, to be able to provide maximum benefits for the country, a good strategy is needed.

"PLN must ensure a guarantee of electricity supply for the Rokan Block so that Pertamina is able to maintain the sustainability of the production of 25% of the national oil," he said.

    Meanwhile, Deputy Minister I of SOEs Pahala Nugraha Mansury hopes that the follow-up to this sale and purchase agreement will run smoothly and in tandem with the management transfer process which will take place soon.

“The Rokan Block is very strategic for Indonesia because it produces 25% of the national oil production. So far, the majority of electrical energy has been supplied by power plants owned by MCTN, so this agreement is very important to ensure the supply of electricity for the Rokan Block in the future," said Pahala.

    Meanwhile, the acquisition of MCTN shares is a follow-up to the cooperation agreement between PLN and Pertamina Hulu Rokan which was included in the memorandum of understanding for the cooperation in providing electricity and steam in the Rokan Working Area on December 30, 2020, and the sale and purchase agreement for electricity and steam on January 29. 2021.


BUSINESS EFFICIENCY

    President Director of Pertamina Hulu Rokan (PHR) Jaffee A. Suardin said with this commitment, Pertamina's position would be even stronger because it had ensured the continuity of the Rokan Block's operational activities.

"The presence of PLN for electricity in the Oil Working Area in the Rokan Block is a form of good BUMN synergy, with the hope of increasing business efficiency, especially related to electricity and steam costs which can be more economical and efficient, so as to be able to support the development of Pertamina Hulu Rokan (PHR) oil wells." Pertamina Hulu Rokan (PHR) with better economies of scale," he said.

    Meanwhile, the demand for electricity and steam in the Rokan Block Oil Working Area is 400 MW and 335,000 barrels of steam per day (Mbspd). Most of these needs are supplied from the 270 MW and 265 Mbspd MCTN plants and the remaining needs are met from the Rokan Block Oil Working Area internal generator.

    The electricity and steam supply is to maintain the continuity of oil production in the Rokan Block Working Area which is expected to be maintained at around 160,000 thousand barrels per day this year with the addition of new wells being drilled. Currently, the Rokan Block production is recorded at 162,951 barrels per day, which is the second-largest production after the Cepu Block in East Java, Indonesia.

    Energy Watch Executive Director Mamit Setiawan explained that the process of signing a share purchase agreement between PLN and MCTN was a new step in the Rokan Block transition process. According to him, through this process, the problem of electricity and steam supply for the Rokan Block can be resolved in the future.

"SOE synergy between Pertamina and PLN is a strategic step in developing and helping fellow SOEs considering the Rokan Block is the backbone of national oil production," said Mamit.

Bisnis Indonesia, Page-4, Wednesday, July 7, 2021

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