January, Upstream Oil and Gas Investment Reaches The US $ 8732 Million

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted that the realization of upstream oil and gas investment in January 2021 reached US $ 873.2 million or 7.05 percent of this year's target of US $ 12.38 billion. This realization is better than the condition in January 2020 which was the only US $ 767.5 million.

Blogger Agus Purnomo in SKK Migas

    Acting Head of Program and Communication Division of SKK Migas Susana Kurniasih said the investment achievement was after the successful completion of the accelerated completion of supporting documents for program implementation at the end of last year.

"So that the realization of investment in January 2021 is higher in number and percentage compared to the same period last year," said Susana.

    Susana explained that the investment realization in January was to support exploration and development activities. These exploration activities were carried out by PT Pertamina EP, PT Pertamina Hulu Mahakam (PHM), ENI East Sepinggan, PT Pertamina Hulu East Kalimantan (PHKT), and PT Pertamina Hulu Energi Offshore South East Sumatra (PHE OSES).

ENI

    Meanwhile, development activities in the form of Well drilling were carried out by PHM, ENI East Sepinggan, Pertamina EP, PT Pertamina Hulu Sanga-Sanga (PHSS), PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ), Petronas Carigali Ketapang II, Exxon Mobile Cepu Limited EMCL, and BP Tangguh.

 Blogger Agus Purnomo in Petronas Carigali Ketapang II

    From the procurement aspect, the 2021 procurement list, which was completed at the end of last year, was able to accelerate the process of procuring goods and services this year.

"In addition, the highest number of procurement packages is in January 2021, so that KKKS (cooperation contract contractors) will have a longer time to carry out operations for upstream oil and gas management," said Susana.

    His party will continue to oversee upstream oil and gas investment this year, including related to licensing and procurement of goods and services. He hopes that the minimum procurement constraints can encourage optimal investment absorption. 

    In addition, his party will coordinate with the Investment Coordinating Board (BKPM) so that this year's upstream oil and gas activity plan can be carried out as planned. He is also optimistic that upstream oil and gas investment this year will be better than last year.

"As world oil prices improve, business players' optimism towards Covid-19 prevention and massive vaccination in various countries including Indonesia, the upstream oil and gas business climate this year will be much better than 2020," said Susana.

    The investment realization also has an impact on the smooth running of upstream oil and gas projects. Of the target of 12 upstream oil and gas projects this year, two projects have started operating in January, namely the KLD ONWJ Project with an investment of US $ 34 million and the gas supply project to the Balikpapan Refinery of US $ 27 million. This month, the US $ 46 million West Pangkah Project is scheduled to start operating.

Investor Daily, Page-10, Wednesday, Feb 24, 2021

Upstream Oil and Gas Investment is US $ 873.2 Million

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) said the realization of upstream oil and gas investment in January 2021 was positive. Investment realization last month was recorded at the US $ 873.2 million or 7.05 percent of the investment target of US $ 12.38 billion this year. 

    Acting Head of Program and Communication Division of SKK Migas Susana Kurniasih revealed that the realization of this investment was higher than the investment achievement in the same period in 2020 which amounted to the US $ 767.5 million or 5.55% of the annual target.

ENI

    Meanwhile, investment realization throughout January 2021 was used to support exploration activities, including by Pertamina EP, Pertamina Hulu Mahakam, ENI East Sepinggan, Pertamina Hulu East Kalimantan, and PHE OSES. In addition, this investment is also used to finance development activities. 

Exxon Mobile Cepu Ltd (EMCL)

    Primarily, the drilling of development wells, such as carried out by Pertamina Hulu Mahakam, Pertamina Hulu Sanga-Sanga, PHE ONWJ, ENI East Sepinggan, Pertamina EP, Petronas Carigali Ketapang II, Exxon Mobile Cepu Ltd (EMCL) and, BP Tanguh.

Blogger Agus Purnomo in Petronas Carigali Ketapang II

BP Tanguh

    Since discussing work, program, and budget (WP&B), SKK Migas claims to continue to coordinate with Cooperation Contract Contractors (KKKS), by conducting supervision and assistance with work program plans that have been approved in WP&B 2021. SKK Migas sees, accelerating the implementation of work programs in KKKS by endeavoring to complete the supporting documents for this year's program implementation has shown good results.

                                Blogger Agus Purnomo in SKK Migas

"So, the investment realization in January 2021 is higher in number and percentage compared to the same period last year, said Susana.

    SKK Migas and KKKS have also completed the 2021 procurement list at the end of 2020 and are also considered to have a positive impact on efforts to accelerate the process of procuring goods and services this year. 

    In addition, the highest number of procurement packages was in January 2021. As a result, KKKS will have a longer time to carry out operations for upstream oil and gas management. Susana explained, efforts to oversee upstream oil and gas investment were continuously carried out from various aspects, including licensing and procurement of goods and services. SKK Migas hopes that the absence of obstacles in the procurement process will contribute to optimal investment absorption.

    Indeed, investment requires support from various related agencies. On that basis, SKK Migas continues to carry out intensive coordination including with the Investment Coordinating Board (BKPM) so that the 2021 work program can be carried out according to the target. 

    SKK Migas is also optimistic that investment realization in 2021 will be better than in 2020. This is in line with the continuing improvement in world oil prices and optimism among business players towards the prevention of Covid-19.

"As well as the implementation of massive vaccinations in various countries including Indonesia, the upstream oil and gas business climate this year will be much better than in 2020," said Susana.

    The improved investment realization also had an impact on the smooth running of upstream oil and gas projects. Of the 12 onstream upstream oil and gas project targets, in January 2021 there were two onstream projects, namely the KLD ONWJ project with an investment value of US $ 34 million and the gas supply project to Pertamina Refinery Unit 5 Balikpapan with an investment value of US $ 27 million.

"In February 2021, the West Pangkah project is planned to be onstream with an investment of US $ 46 million," concluded Susana.

Kontan, Page-13, Tuesday, Feb 23, 2021

The Jumbo Oil and Gas Project Is Still Ongoing

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) ensures that several upstream oil and gas projects are still continuing. This is to support the achievement of oil production targets of 1 million barrels per day and natural gas 12 billion standard cubic feet per day by 2030.

the Merakes project 

    Deputy for Operations of SKK Migas, Julius Wiratno, said that major projects in the upstream oil and gas sector are still in the construction stage, some of which are expected to be completed by the end of 2021. One of them is the Merakes project which is being worked on by Eni East Sepinggan.

Eni

"We hope this project can be on stream in April with gas production of 380-400 mmscfd," he said.

the Jambaran Tiung Biru (JTB)

    There is also the Jambaran Tiung Biru (JTB) project that is being supported by SKK Migas and the government so that it can be on stream in November this year. In the future, the project managed by PT Pertamina EP Cepu (PEPC) will produce 350 mmscfd of gas.

    SKK Migas is also working on the Tangguh Train-3 project that BP Berau Ltd is working on to be on stream immediately at the end of this year or early next year.

Blogger Agus Purnomo in SKK Migas

    The project is indeed constrained from an operational perspective due to restrictions on social activities in the context of tackling the Covid-19 pandemic.

the Masela Block

"Other major projects such as Indonesia Deepwater Development (IDD) and the Masela Block are in the process of business-to-business discussions between contractors and their partners," said Julius.

Indonesia Deepwater Development (IDD) Chevron

    The IDD project is facing obstacles because its main investor, Chevron Pacific Indonesia, is reportedly leaving, even though this project should be targeted to be on stream in 2025.

Kontan, Page-10, Saturday, Feb 20, 2021

Hard Work in the Upstream Oil and Gas Industry

 

Although the oil and gas industry is still challenging, the Special Task Force for Upstream Oil and Gas Business Activities or SKK Migas still targets 14 upstream projects to start operating this year.

SKK Migas Operations Deputy Julius Wiratno said that this year, there were 12 upstream oil and gas non-PSN (National Strategic Projects) projects that were targeted to start operating or onstream. The number is an increase of one project compared to last year's target.

Blogger Agus Purnomo in SKK Migas

"There will be 12 non-PSN projects on stream with a project value of US $ 354 million and the potential for additional oil production of 27,000 bpd and 492 MMscfd of gas," he said.

Meanwhile, the two PSN projects that will be onstream in 2021 are the Jambaran Tiung Biru project by PT Pertamina EP Cepu (PEPC) and the Tangguh Train-3 project by BP. 

PT Pertamina EP Cepu (PEPC)

    The Jambaran Tiung Biru project is projected to be onstream in the fourth quarter of 2021. The project work as of the third quarter of 2020 still reached 74.28% of the target of 88.28%. 

The Jambaran Tiung Biru Oil Field

    Similar to the Tiung Biru Jambaran Project, the Tangguh Train-3 project is projected onstream in the fourth quarter of 2021. As of September 2020, the progress of Tangguh Train-3 onshore work has reached 88.27%, and offshore has reached 98.27%.

the Tiung Biru Jambaran Project

"Apart from the difficulties of the Covid-19 pandemic, we are still targeting onstream at the end of 2021," he said.

Although SKK Migas is optimistic that the work plan in the upstream oil and gas sector will proceed as planned, a number of challenges, particularly those affecting the project's economy, are still looming. The government is also considered to have to be more active so that a number of oil and gas projects whose work is constrained can be realized immediately. 

    So far, there are two upstream oil and gas projects that are still unclear because the company plans to release its participation, namely Shell in the Masela Block Abadi field project and Chevron in the Indonesia Deepwater Development (IDD) project.

Trisakti University teaching staff Pri Agung Rakhmanto explained that in the case of the Masela Block project, the government needs to be more active to play a role in obtaining gas buyers. Meanwhile, in the IDD project, middle ground and a compromise must be found in terms of project economics. 

    An observer of the energy economy from Gadjah Mada University Fahmy Radhi is of the opinion that the government should step in so that the Masela Block construction can be completed on time, including in land acquisition to build a pipeline network. This is an important part needed to distribute the gas produced from the Abadi field.

"The challenge is completing the construction and pipeline infrastructure for gas distribution from the Masela Block to consumers. With great prospects, it is not difficult for Inpex to find investors to replace Shell, "he said.

The Executive Director of the National Oil and Gas Companies Association (Aspermigas), Moshe Rizal Husin, assessed that the homework that the government still has to do is to revive the investment climate in the upstream oil and gas sector. Meanwhile, based on SKK Migas data, the realization of upstream oil and gas investment in 2020 only reached the US $ 10.21 billion, lower than the target of US $ 12.1 billion. For this year, SKK Migas is targeting upstream oil and gas investment of US $ 12.3 billion.

"There must be a significant breakthrough and commitment from the government that creates certainty. The oil and gas business is long-term and has a very large multiplier effect, ”said Moshe.

Moshe hopes that the condition of the upstream oil and gas industry this year can run better with stable oil prices at a level above the US $ 50 per barrel or even could improve to the level of US $ 60 per barrel in the third quarter of 2021.

KEEP PRODUCTION

In other developments, the development program in the Mahakam Block will run more aggressively in order to reduce the rate of natural production decline. SKK Migas has approved the work plan of PT Pertamina Hulu Mahakam (PHM) in 2021 with more drilling activities compared to 2020. Thus, production in the Mahakam Block in 2021 is expected to increase with more massive and aggressive optimization.

Deputy of Finance and Monetization of SKK Migas Arief S. Handoko said that if production from the Mahakam Block drops, domestic LNG production will also decline. However, PHM will get incentive approval so that production is maintained.

Merakes Field By ENI Italy

"The possibility of production stays, even increases. In addition, there is a new Merakes field that will contribute so that LNG production will increase, ”he explained.

Agus Amperianto

Likewise, General Manager of PHM Agus Amperianto said that his party is optimistic that it can maintain production in the Mahakam Block by optimizing work in the field development operations that have been approved by SKK Migas.

"Currently, what is possible for Mahakam to do is how to survive in times of crisis," he said.

He added that this year there are a number of efficiency programs, including reducing the operating costs of the Mahakam Block effectively and efficiently. In addition, PHM will also strengthen operational activities through collaboration, strengthening knowledge management, and organizational transformation. 

    Based on the 2021 work program and budget (WP&B), PHE will carry out 73 development well drilling activities and two exploration wells drilling. Meanwhile, as of December 31, 2020, the realization of PHE's oil and gas production was still above the target.

Oil and condensate production was recorded at 26,363 bpd or 102% of the revised WP&B of 25,722 bpd. Meanwhile, gas production reached 606 MMscfd or 103% compared to the revised WP&B of 588 MMscfd.

Bisnis Indonesia, Page-4, Tuesday, Jan 5, 2021

LNG Tangguh Train-3 Papua focuses on targeting the domestic market

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) ensures that it will gradually reduce the export contract for Liquefied Natural Gas (LNG) cargo from the Tangguh Train-3 project. 

Blogger Agus Purnomo in SKK Migas

    This condition will increase the volume of LNG that has not been contracted. For this reason, SKK Migas will focus on finding vacancies in the LNG contract in the domestic market.

Dwi Soetjipto

    Head of SKK Migas, Dwi Soetjipto, said that one of the consumers who will buy the Tangguh Train-3 LNG is PT Perusahaan Listrik Negara (PLN). In 2022, PLN is projected to purchase 60 cargoes of LNG.

PT Perusahaan Listrik Negara (PLN)

"We hope that PLN can buy what has been allocated, said Dwi Soetjipto.

    For information, the Tangguh Train-3 project is projected to be onstream in the fourth quarter of 2021. That means retreating from the target in the second quarter of 2021. The gas sales for the Tangguh Train-3 project owned by BP Berau Ltd will reach 595 million cubic feet per day (mmscfd).

"Production started in the first year of about 40 cargoes and an increase of 60 cargoes in the following years," he said.

    Apart from being purchased by PLN, Kansai Electric is the LNG consumer of Train-3. 

Susana Kurniasih 

    SKK Migas Acting Head of Program and Communication Susana Kurniasih stated that SKK Migas and BP Berau Ltd are committed to providing the volume according to the contract. 

    She said the domestic market was a priority for Tangguh LNG purchases. When the domestic market has bought optimally, the excess LNG will be exported.

Kontan, Page-10, Saturday, Oct 3, 2020.

Tangguh Project Increases Number of Workers

 

BP Berau Ltd as the operator of the Tangguh Field in West Papua will begin to increase the rate of construction of Tangguh Train 3 by increasing the number of workers in the field (the person onboard / PoB) from 6,300 PoB to 7,700 PoB. 

Tangguh Field West Papua

    This step is taken after the operator can keep Tangguh Field Covid-19 free and have emergency response readiness to maintain the progress of the project.

Blogger Agus Purnomo in SKK Migas

“SKK Migas received a report from BP Berau Ltd regarding the development of the Tangguh train-3 expansion project schedule. The success of the operator in keeping the project Covid-19 free is encouraging news. 

    This shows that the upstream oil and gas project can still be realized by implementing the Covid-19 health protocol and applying K3 standards at a high level, "said SKK Migas Head of Program and Communication Division Susana Kurniasih, Head of the Task Force.

Susana Kurniasih

The increase in the number of workers in the field was carried out after going through a series of evaluations. Due to this success, BP Berau Ltd as the operator plans to gradually increase the number of Tangguh train 3 project workers.

"We hope that this step is one of the efforts to accelerate the completion of the project, which was slowed down due to the Covid-19 pandemic," said Susana.

Previously, when the Covid-19 pandemic began to enter a number of regions in Indonesia at the end of February 2020, the upstream oil and gas industry significantly reduced activities in the field, as an effort to prevent the spread of the Covid-19 pandemic. 

    At that time the Tangguh project in West Papua had to reduce workers in the field, from 13,000 Person on Board (BOP) to around 6,300 BOP. The reduction of up to 50% of these workers is a medical recommendation so that a “keep your distance” scenario can be carried out in the field.

Susana added that starting to increase the number of project workers at Tangguh train 3 will be good news for the goods/service provider industry and the local community.

"The increase in the number of project workers will have a positive impact on the economy, create jobs and of course as a form of support for the upstream oil and gas industry to be able to maintain people's purchasing power during the Covid-19 outbreak," She said.

Tangguh train-3 is a national strategic project which when it is onstream will provide a significant additional national oil and gas production. This project will produce 3,000 BOPD of oil and 700 MMSCFD of gas. The investment value for the Tangguh train-3 project is estimated at the US $ 8.9 billion. 

    Meanwhile, until June 2020 the realization of the Tangguh train-3 project development for onshore was 83.27% of the target of 84.35% (rebaseline plan) and offshore development was 98.15% of the target of 99.39% (plan).

SKK Migas and KKKS continue to coordinate and seek innovations during the Covid-19 pandemic so that oil and gas production and lifting can remain optimal. The step in maintaining the Tangguh train-3 project and other upstream oil and gas projects is one way for SKK Migas to realize the production of 1 million barrels of oil and 12,000 MMSCFD of gas by 2030.

Investor Daily, Page-9, Saturday, Sept 12, 2020

The government is advised to invite oil and gas junior companies

The government is advised to invite junior companies (small companies) that focus on oil and gas exploration activities. This is because the discovery of significant oil and gas reserves is the key to achieving the target of producing 1 million barrels of oil per day (BPD) by 2030. 

       Practitioners of Oil and Gas Tumbur Parlindungan revealed that large oil and gas companies rarely voluntarily disburse large funds for large-scale exploration activities. This can be seen from the lack of large oil and gas companies participating in the management of new oil and gas blocks through auctions held by the government.

For this reason, he advised the government to invite junior companies to look for potential oil and gas reserves in the country. This is because, in the world, junior companies usually focus on finding oil and gas reserves to be sold to large oil and gas companies. He gave an example, the discovery of large gas at Tangguh was actually carried out by Arco. However, BP, which is now the operator there, acquired the company.

"We need to invite small companies but want to take exploration risks. We need pioneers who want to drill, we need players who want to play exploration, big companies focus above 100 million barrels and above, "said Tumbur.

According to him, data on oil and gas reserves owned by Indonesia are currently difficult to compete with other regions. At present, large oil and gas companies are actually targeting Africa, which has proven oil and gas reserves in large quantities. This will only happen in Indonesia if there are 11 proven huge oil and gas reserves.

"The company will come if the reserves are proven large," said Tumbur.

Tumbur explained, large companies such as Shell, Chevron, Exxon, and Total would not be interested in oil and gas reserves whose volumes were less than 100 million barrels of oil equivalent. 

Furthermore, companies such as HESS, ConocoPhillips, and National Oil Company (NOC) such as Petronas, PTTEP Thailand, Repsol, will only glance at one area if the reserves are more than 50 million barrels of oil equivalent. 

In fact, he continued, the flow of foreign investment funds is very important so that exploration activities can run massively in Indonesia.

Blogger Agus Purnomo in Petronas PC Ketapang

"We see that our oil and gas block auction is not very large, so it will not be in demand by large companies," he said.

Repsol

On the other hand, the success of finding oil and gas reserves (success ratio) in Indonesia is still less than 50%. This could also be an obstacle to achieving the 1 million BPD oil production target. He gave an example, the findings of oil and gas in Ande-Ande Lumut could be one of the big findings, but the problem of monetization and the use of technology could hamper its development.

Referring to the data of the Ministry of Energy and Mineral Resources (ESDM), the number of the signing of production sharing contracts (PSCs) from oil and gas block auction results has been relatively low since 2015. In 2015, the government signed 8 PSCs. But afterward, although the auction was still held, in 2016-2017, not a single PSC was signed. Furthermore, as many as 11 PSCs were signed in 2018 and 6 PSCs last year. In fact, the signing of the PSC in Indonesia touched 26 contracts in 2011.

Inline, the realization of national oil and gas exploration investment has also been relatively low since 2015. In 2015, the realization of exploration investment was recorded to still reach the US $ 970 million. However, this exploration investment continues to decline to the US $ 916.2 million in 2016, US $ 576.55 million in 2017, and rose to the US $ 786.18 million in 2018. In fact, exploration investment in Indonesia once touched the US $ 3, 05 billion in 2013.

Must be planned

Another strategy from the government to reach the target of 1 million BPD is through enhanced oil recovery (EOR) activities. According to Tumbur, this EOR activity must be planned from the beginning in the development of an oil and gas block. The reason is that EOR activities will not be effective and will require large costs if they are only carried out when the oil and gas reserves of an oil and gas block are almost gone.

"During the decline, the energy strategy has been lost. If it was only EOR at that time, the cost was more expensive. EOR continues improvement, there are pilots from the start. If it's already [production] road it's difficult to run, "said Tumbur.

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) once made an additional projection of oil production from EOR activities. Referring to the projection, the newly initiated EOR activities can significantly increase oil production starting in 2025. Referring to the data, national oil production is projected to only be 281 thousand BPD by 2030 if no EOR activities are carried out. However, if the EOR is successfully implemented, oil production can be bent to 520 thousand BPD that year.

However, at present, the EOR activities are still in the pilot phase. PT Pertamina (Persero) through Pertamina EP has implemented EOR in Tanjung Field. The company has also signed the points of understanding between Pertamina and Repsol for full-scale management, including the implementation of surfactant-polymer EOR. In the Jirak and Rantau Fields, Pertamina is conducting a study of the application of surfactant chemicals for the implementation of EOR in both fields.

Furthermore, related to CO2 flooding, Pertamina is currently conducting studies in several fields, namely Jatibarang, Sukowati, and Ramba. Pertamina also expanded this EOR activity to the oil and gas block managed by PT Pertamina Hulu Energi (PHE), namely in the North West Java Offshore Block, precisely in the Zulu Field and E-Main. In addition, in the near future the Batang field, which is operated by PHE Siak, will be an EOR steam flooding pilot project.

Investor Daily, Page-9, Thursday, May 9, 2020

Threatened to be Delayed, SKK Migas Monitor Tangguh Train 3

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) does not deny that there is a potential delay of the Tangguh Train 3 project by BP Berau Ltd due to the corona pandemic. For this reason, SKK Migas is ready to oversee the sustainability of this 3.8 million ton per year (MTPA) project.

SKK Migas Deputy for Operations Julius Wiratno said that in fact the project is still ongoing, especially in vital works. Nevertheless, the number of manpower and equipment logistics support is said to be an obstacle.

"Activities that enter the critical construction stage are still ongoing when there are limited personnel and supporting equipment because there are restrictions on the number of workers and physical distancing," explained Julius.

the Tangguh Train 3 project

At present, the Tangguh Train 3 project is entering the peak of the construction phase. The procurement of equipment is considered not so constrained. Because most of the tools needed have been brought to the project site. To be sure, the reduction in the number of workers has a major effect on the progress of completing construction

"The total workforce reached 13,000 last week, down to 10,000 and will continue to drop to 3,000 for core jobs, Julius said.

Nevertheless, he ensured that intensive coordination continued between the Cooperation Contract Contractor (KKKS) and SKK Migas. In the face of existing limitations, SKK Migas seeks to ensure that this project can remain on-line as targeted in the third quarter of 2021.

"Of course there will be negative impacts and there is the potential to be somewhat backward. While we anticipate and pay close attention, coordination has been very intensive," said Julius.

Kontan, Page-13, Friday, March 27, 2020