PLN Take Over Electricity Block Rokan and INCO

    The development of the Cogen PLTGU auction process in the Rokan Block and the provision of electricity for the PT Vale Indonesia Tbk (INCO) smelter began to be revealed. The latest news is that PT Perusahaan Listrik Negara (PLN) is preparing to acquire 100% of Cogen's PLTGU shares in the Rokan Block and provide electricity for the INCO smelter.

the Rokan Block Chevron

    PLN's Director of Commerce and Management, Bob Saril said, PLN would acquire the Cogen PLTGU with a capacity of 300 MW owned by a subsidiary of Chevron Standard Limited named PT Mandau Cipta Tenaga Nusantara (MCTN).

"We are in the process of taking over 100% of the shares (PLTGU Cogen). If the value has not been announced, we can convey," he said.

    In 1990, MCTN built the plant with an investment of around US$ 120 million. However, currently, in the auction process by MCTN, the value is said to reach US$ 300 million. "There are funds for the acquisition (PLTGU Cogen)," said Bob.

    PLN's management is currently in the negotiation process with Chevron Standard Limited (CSL), which is the parent of MCTN. In fact, PLN claims to have succeeded in reaching agreements regarding the provisions of the conditional share purchase agreement (CSPA). "There will be a share purchasing agreement, we can sign it in the not too distant future," he said.

    Bob confirmed that by the end of June there should be certain regarding the acquisition process. This week, MCTN will announce the results of the auction. "If you look at the auction process or the sale of shares, they (MCTN) will announce this week. Then they have one month to wait if there are questions from outside. After that, we will sign," said Bob.

    Not only the power plant in the Rokan Block, but PLN has also signed an agreement with PT Vale Indonesia Tbk to provide electricity for the smelter that needs to be built. Bob said that PLN had signed a non-disclosure agreement (NDA) with INCO in May 2021. 

    PLN is currently in the discussion stage of data sharing and information regarding the construction of the INCO smelter in Sulawesi. However, so far there has been no memorandum of understanding (MoU) or transaction agreement agreed or signed between the two.

"(However) it is already in the stage of detailed discussion in that direction," said Bob.

    Similar to the Cogen PLTGU, Vale's PLTGU with a capacity of 500 MW is also undergoing an auction period which is being followed by Medco-Pertamina Power, Golar-Equinox, and Tripatra-BP. 

"PLN is optimistic that it can compete with other parties to be appointed as the party trusted to supply INCO's smelter electricity," said Bob.

    If successfully appointed, PLN will connect the INCO smelter to the Southeast Sulawesi and Central Sulawesi electricity systems. If necessary, PLN is also ready to relocate the PLN's Gas and Steam Power Plant (PLTGU) on the island of Java. According to Bob, this option will not interfere with the reliability of the electricity supply in Java. This is because the reserve power available in Java-Bali is still large, which is around 45% of the peak load.

Kontan, Page-13, Thursday, June 24, 2021

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

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

Chevron Gives License to Use IT Applications to Pertamina

    In order to support the smooth transition of the Rokan Block, PT. Chevron Pacific Indonesia (PT CPI) has agreed to license the use of 123 information technology (IT) applications to Pertamina Hulu Rokan (PHR) as the next operator. These applications have been very important in supporting the digitization of oil and gas operations and production activities in the Rokan Block to run efficiently.

PT. Chevron Pacific Indonesia (PT CPI)

“Information and data technology is one of the main components in the Rokan Block transition process. Therefore, the transfer of management to the next operator must be carried out carefully and systematically so that the operation of the Rokan Block continues without technical problems when it is transferred on August 9," said Managing Director of Chevron IndoAsia Business Unit & President Director of PT CPI Albert Simanjuntak.

    Almost all IT applications that have been used by PT CPI will be granted a user license to PHR. These applications, among others, are used for monitoring oil production and transportation in real-time, monitoring the condition of wells and drilling rig activities, regulating the Duri field steam injection, managing partners, managing the procurement of goods and services, and others.

    Last April, PT CPI, and PHR signed an agreement to activate the Rokan Transition Network (RTN), which is an intermediary network used to transfer PT CPI's applications. PHR will be able to access the RTN to install and test commercial applications. PT CPI supports the preparation of all applications that are licensed to use the PHR so that they can operate properly before the process of transferring the management of the Rokan Block. 

    To date, more than 80 applications have been completed in the RTN. In addition, PT CPI also cooperates intensively with PHR to transfer data into IT systems/applications that will be needed after the transfer of management of the Rokan Block.

Blogger Agus Purnomo in SKK Migas

"The parties involved, namely SKK Migas, PT CPI, and PHR, have the same passion and commitment to realize a safe, smooth, and reliable management transfer so that coordination takes place well," said Albert.

the Rokan Block by Chevron

    Joint Utilization The success of the drilling program is an important part of efforts to maintain production levels in the Rokan Block after the transfer of management. To ensure the availability of material supplies to support the drilling program, PT CPI and PHR have signed a joint utilization agreement of state-owned warehouse facilities in the Rokan Block on April 21. 

    With this agreement, PHR can begin to import and store materials to support the drilling program in warehouses managed by PT CPI in Duri and Dumai. These materials include pipes, conductors, casings, tubing, wellheads, valves, cables, and pumps. Currently, a number of PHR materials have arrived at PT CPI's warehouse in Dumai. The arrival of other materials will follow.

"Hopefully, after the date of the transfer of management later, the drilling program can continue without any disruption to material supply because PHR's materials are already available in the field," said Albert.

Working Area the Rokan Block

    PT CPI is a Cooperation Contract Contractor (KKKS) from the Government of Indonesia that operates the Rokan Block in Riau. In operating the Rokan block, PT CPI works under the supervision and control of SKK Migas.

Investor Daily, Page-10, Thursday, June 3, 2021

Riau Governor Supports Transfer of Management of Rokan Block from Chevron to Pertamina

    The Riau Provincial Government is ready to support the process of transitioning the Rokan Block from PT Chevron Pacific Indonesia (CPI) to Pertamina. By being managed directly by Pertamina, it is hoped that in the future the Rokan Block will make an increasingly significant contribution to meeting the national oil and gas energy needs.

PT Chevron Pacific Indonesia (CPI)

"We hope that after the transition process is complete, and the Rokan Block is managed by Pertamina, the part of the regional government to manage the PI (Participating Interest) of 10% can also take place. We have prepared Regional Owned Enterprises (BUMD) to participate in the management of this PI," said Syamsuar when receiving a visit from Jaffee Arizon Suardin, President Director of PT Pertamina Hulu Rokan (PHR) - Sumatra Region, at the Riau Governor's Office House.

Blogger Agus Purnomo in SKK Migas

    Also attending the working visit was the Head of SKK Migas Representative for North Sumatra (Sumbagut) Rikky Rahmat Firdaus, Head of the Operations Department of SKK Migas Sumbagut Representative Haryanto Syafrie, and Head of the Riau Energy and Mineral Resources Office Indra Agus Lukman. 

    Syamsuar explained, after going through the bidding process and evaluating all BUMDs in Riau Province, finally two Regional Owned Enterprises (BUMD) were selected that met the criteria to participate in the PI in the Rokan Block, namely PT Riau Petroleum and PT Bumi Siak Pusako.

    The Governor of Riau also hopes that PHR can empower BUMD, local contractors, and local workers for operational support activities for the Rokan Block.

“The most important thing is the status of former CPI workers and their subcontractors. The rights of workers must be a concern for Pertamina," he said.

Jaffe Arizon's working visit to the Governor of Riau to prepare for the transfer of management of the Rokan Block. During this visit, Jaffee wanted to ensure that the transition process went smoothly and that the Riau Provincial Government supported the process of transitioning the management of the Rokan Block to Pertamina. 

the Rokan Block by Chevron

    Regarding the status of former CPI workers, Pertamina's Human Capital (HC) team has prepared all the things needed for the transition process for CPI workers to become part of Pertamina. The management of the Rokan Block by CPI will end on August 8, 2021, and on August 9, 2021, the Rokan Block will be officially managed by PT Pertamina Hulu Rokan (PHR) under the Gross Split Production Sharing Contract (PSC) scheme and the local government has 10% PI rights, based on the Minister of Energy and Mineral Resources Regulation No. 37 of 2016.

Working Area the Rokan Block Chevron

    The Rokan Block is located in Riau Province, with working areas in five regencies, namely Rokan Hulu, Rokan Hilir, Bengkali, Siak and Kampar, as well as two cities, namely Pekanbaru and Dumai. With a working area of ​​6,300 KM2, the Rokan Block has 80 production fields with more than 12,000 wells.

Investor Daily, Page-10, Thursday, June 3, 2021

Global Oil and Gas Investors Start Leaving Indonesia

    A number of cooperation contract contractors (KKKS) chose to leave after years of investing in Indonesia's oil and gas fields. After Royal Dutch Shell confirmed that it would leave the Masela Block (Maluku), now ConocoPhillips intends to leave the Corridor Block (South Sumatra).

Blogger Agus Purnomo in SKK Migas

    Deputy Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Fatar Yani Abdurrahman revealed that ConocoPhillips' plan to release Participating Interest (PL) ownership shares in the Corridor Block had been submitted to SKK Migas.

"Verbally, it has been conveyed like that, releasing Participating Interest (Pl) shares," he said.

    Although it has stated its intention verbally, ConocoPhillips has not detailed further the reasons for releasing Participating Interest (PL) ownership shares in the Corridor Block. Fatar confirmed that there is no planned meeting with ConocoPhillips. SKK Migas is still waiting for ConocoPhillips' official proposal submission. ConocoPhillips Vice President Commercial and Business Development Taufik Ahmad declined to comment further on this news.

"Until now there has been no additional explanation apart from what was conveyed by SKK Migas," he said.

    Currently, ConocoPhillips is listed as the contractor for the Corridor Block with a 54% participating interest and Repsol Energy has a 36% interest. Meanwhile, Pertamina has a participating stake of 10%. The production sharing contract (PSC) in the Corridor Block will expire on December 20, 2023. 

    A new production sharing contract was signed in 2019, whereby the existing KKKS received a 20-year extension with a Gross Split PSC. In the period 2023-2026, there will be a transition period, in which ConocoPhillips will still be the operator. However, after this period, the operatorship will be transferred to Pertamina.

Repsol

    Later, in the latest production sharing contract, there will be a change in the amount of Pl, namely Pertamina Hulu Energi Corridor controlling 30%, ConocoPhillips 46%, and Repsol 24%. The planned departure of ConocoPhillips adds to the long list of global oil and gas companies leaving Indonesia. 

    In July 2020, Royal Dutch Shell plans to withdraw from the Masela Block Perpetual Gas Project. Shell, which holds a 35% participating stake, is still looking for a replacement candidate.

    Another investor who also intends to leave is PT Chevron Pacific Indonesia (CPI) which will release its participating stake in the Indonesia Deep Water Development (IDD) Block. After Shell left, SKK Migas Deputy Operations Julius Wiratno said the search for partners for the Masela Block is targeted to be completed by the end of this year.

"Shell is in the process of looking for a replacement until the end of this year. Chevron is the same way. This is common in the business world," he said.

    In this situation, Julius ensured that the government could not intervene in the ongoing business-to-business process. The Executive Director of the Reforminer Institute, Komaidi Notonegoro, believes that the government needs to evaluate the upstream oil and gas business regarding the plans of global investors who want to leave.

"However, domestic business actors such as Pertamina need partners," said Komaidi Notonegoro.

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) projects that this year's oil and gas lifting will reach 97.3% of the target in the 2021 State Budget (APBN). Head of SKK Migas Dwi Soetjipto projects that this year's oil and gas lifting reached 1.6 million barrels of oil equivalent per day (MBOEPD) or lower than the target in the 2021 State Budget of 1,711.78 MBOEPD.

    Referring to the realization in the first quarter of 2021, according to Dwi, there is still pressure on oil and gas production. On the other hand, there was also an unplanned shutdown and a delay in drilling execution. 

"There is also a delay in the onstream schedule of several oil and gas fields so that the total is reduced by 25,000 barrels per day and gas by 99 mmscfd from the target that has been set," he said.

    Dwi added, in order to cover the existing production gap, SKK Migas targets additional drilling activities this year. They predict drilling activities can increase to 700 activities.

Kontan, Page-13, Wednesday, June 2, 2021

Rokan Block Switching Staggered

    The process of transitioning the Rokan Block from PT Chevron Pacific Indonesia (PT CPI) to PT Pertamina (Persero) is still ongoing. The PT Pertamina Hulu Rokan (PHR) process was hampered by the spread of the SARS-CoV-2 virus. Director of State Receivables and Other State Assets, Ministry of Finance (Kemenkeu), Lukman Efendi confirmed that the process will continue. Until now, the transition is still reaching 10 percent.

PT Chevron Pacific Indonesia (PT CPI)

“There is a transition of 10 percent of the total land area of ​​around 64 thousand hectares. Will become BMN (State-Owned Goods). We have done a physical check," said Lukman.

    In addition to the inspection of land assets which reached 10 percent, there was an inspection of capital assets which had reached 83 percent. Now, inspections related to inventory assets have reached 60 percent. So far, only the inventory material inspection has been completed 100 percent. Lukman hopes that the entire management transfer process can be completed before August 8, 2021.

    The government continues to try to go through the process before the termination or expiration of the cooperation contract. The value of the Rokan Block BMN was recorded at Rp. 197.78 trillion. This amount reaches 20 percent of the total value of the National Cooperation Contract Contractors (KKKS) BMN which is Rp 497.62 trillion as of 2019.

"Wealth in the form of land, inventory assets, and capital assets," he added.

the Rokan Block

    Previously, Riau Governor Syamsuar voiced his hope that oil and gas production from the Rokan Block could be maximized. This is because regional revenues are highly dependent on oil and gas revenue sharing. 

    The Riau Regional Government is committed to supporting the smooth transfer of management of the Rokan Block and facilitating it. Syamsuar also stated the readiness of Regional Owned Enterprises and local companies to cooperate business-to-business.

"The Riau Regional Government is ready to help facilitate licensing in this transitional period of management," he added.

the Rokan Block

    The Rokan Block is the largest oil block in Indonesia. It covers an area of ​​6,220 square kilometers and covers five districts in Riau. Namely, Bengkalis, Siak, Kampar Rokan Hulu, and Rokan Hilir.

Jawa Pos, Page-3, Monday, May 31, 2021