Pertamina Prepares to Manage Rokan Block

 

    Pertamina is ready to take over the management of the Rokan Block on August 9. President Director of PT Pertamina Hulu Rokan (PHR) Jaffee A Suardin met with Riau Governor Syamsuar to convey his readiness for the transfer of management.

    Jaffee said PHR is ready to enter and manage the Rokan Block. A number of transitional preparations have been made, including those related to PT Chevron Pacific Indonesia (CPI) workers who are employees of PT PHR. A total of 2,691 CPI workers agreed to join PHR. So, later the Rokan Block operation will be carried out by the team, it will take a long time.

PT Chevron Pacific Indonesia (CPI)

"Then for the work contract, we have also done mirroring with CPI and it has reached 100 percent," said Jaffee.

    Jaffee also conveyed the plan for a ceremony to transfer the management of the Rokan Block from CPI to PHR on the turn of August 8 to 9, 2021. The activity was carried out online by inviting the Riau Province Regional Leadership Communication Forum and 7 regional heads of the Rokan Block working area.

Blogger Agus Purnomo in SKK Migas

"Preparations for the ceremony have been carried out by SKK Migas, CPI, and PHR, and also ensure that the transfer of management process will run smoothly and all work in the Rokan Block can run smoothly," said Jaffee.

    Riau Governor Syamsuar appreciated the presence of the Director of PHR. He hopes that the process of managing the Rokan Block from CPI to PHR can run smoothly.

The Rokan Block by Chevron

"We hope that this transfer of management will run smoothly, work in the Rokan Block will continue and production will also continue to increase," said Syamsuar.

    He also hopes that the presence of PHR in the Rokan Block can have a good impact on the people of Riau. In this regard, the regional government has prepared Regional Selected Business Entities (BUMD) to participate in the management of this participating interest. Of course, we hope that it will have a good impact on development in Riau and the welfare of the people of Riau," said Syamsuar.

    The Rokan Block with an area of ​​6,453 km2 produces around 165,000 barrels of oil per day (BPD) or 24 percent of national oil production. To increase production after the transfer of management, PHR targets to drill 181 new wells for the period August-December 2021.

    Managing Director of Chevron Indo Asia Business Unit & President Director of Chevron Pacific, Albert Simanjuntak, said the Rokan work area is a strategic asset for state and regional revenues, the community's economy, and national energy security.

“It is an honor for us to be able to manage this asset well,” said Albert.

    He thanked the dedication and performance of tens of thousands of Chevron employees, including retirees over the years.

    According to him, the strong performance of Rokan's work area so far is inseparable from the Human Resources factor behind it, namely employees with existing skills, culture, and work ethic. He is optimistic that they can make a big contribution to the new company.

Republika, Page- 9, Thursday, Aug 5, 2021

Production Targeted to Increase

 

    After officially managing the Rokan Block, PT Pertamina (Persero) through PT Pertamina Hulu Rokan (PHR) is targeted to be able to produce oil with higher achievements.

PHR

    Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Julius Wiratno said that with the number of drilling activities and the availability of more massive tools, production in the Rokan Block is targeted to increase.

"Until December 2021, with around 17-18 rigs drilling, production could be around 175,000-180,000 barrels per day," he said.

Blogger Agus Purnomo in SKK Migas

    Meanwhile, based on SKK Migas data, production in the Rokan Block throughout the first semester of 2021 by PT Chevron Pacific Indonesia (CPI) was at the level of 160,646 barrels of oil per day (BPD), this figure is lower than the target set in the 2021 State Budget of as much as 165,000 BPD.

PT Chevron Pacific Indonesia (CPI)

    President Director of PT Pertamina Hulu Rokan (PHR) Jaffee Suardin believes production in the Rokan Block can increase when the transfer of management is carried out. The reason is, throughout this year Pertamina is targeting massive drilling. PT Chevron Pacific Indonesia (CPI) plans to drill as many as 161 wells after the transfer of management in the Rokan Block which will begin on August 9, 2021.

The Rokan Block by Chevron

    Jaffee said that there will be an additional 77 wells from CPI's commitment which will not be completed until the management transfer period on August 9th. In the previous target, Pertamina planned to drill only 84 wells for 2021.

"As of December 161 wells, the target production level is maintained and can increase," he said.

    Jaffee said PT Pertamina Hulu Rokan (PHR) had prepared the resources needed to realize the plan. To realize the Wells drilling plan, 16 to 17 rigs have been prepared.

    In addition, Jaffee said that all human resources, as well as supporting materials, have been prepared so that when the transition period is over, all activities can start immediately.

"For that, we continue to make preparations, from Pertamina's side, the planned number of rigs, materials, from Pertamina's side, are ready. So, the goal is that the transfer of management process will run smoothly without any disturbances,” said Jaffee.

Bisnis Indonesia, Page- 4, Thursday, Aug 5, 2021

Pertamina Continues 318 Contracts for Goods and Services in the Rokan Block

    PT Pertamina Hulu Rokan (PHR) will continue with 318 contracts for the supply of goods/services with vendors who previously partnered with PT Chevron Pacific Indonesia (CPI). This step is considered to guarantee the continuity of the procurement of goods/services after the transfer of management of the Rokan Block, Riau, from Chevron to Pertamina starting August 9, 2021.

PT Pertamina Hulu Rokan (PHR)

    Regarding the partnership, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) hopes that PT Pertamina Hulu Rokan (PHR) will increase the empowerment of local vendors. PHR Business Support Project Leader Danang Ruslan Saleh assessed that 318 contracts out of 379 active contracts were in accordance with the company's needs.

"A total of 298 contracts have been completed in the mirroring process to ensure the continuation of the contracts that were signed when the vendor became a partner of Chevron Pacific Indonesia," he said.

    A total of four contracts of which are in the process of being amended due to the addition of post-management drilling activities. As a result, the need for rigs will be more than the rigs in the current contract. Not only contracts, but PHR has also prepared a work order for the next month so that there are no problems in providing goods/services in the operation of the Rokan Block after the management transfer.

Blogger Agus Purnomo in SKK Migas

    In addition, PHR will continue the local business development activities initiated by Chevron. Chevron Pacific Indonesia VP Procurement & Contract Sigit Pratopo said his party had provided data and information to SKK Migas and PHR, including a copy of the contract and purchase request for the mirroring process, a copy of the local business development/LBD contract for the procurement process, as well as inventory data for warehouse management by PHR.

the Rokan Block by Chevron

    This step is one way to keep the operation of the Rokan Block optimal. Post-transition, Chevron will continue the process of contract closing and purchase requests. The goal is to ensure the fulfillment of the obligations of partners providing goods/services as well as paying contract bills and purchase requests under the Chevron Pacific Indonesia entity.

    Regarding contracts with local businesses, the Head of the Division of Supply Chain Management and Cost Analysis of SKK Migas Erwin Suryadi said PHR could increase the number of LBDs involved in Riau. Currently, Riau consists of 14 areas of ring one with a total of 699 active LBD actors.

    SKK Migas data as of May 2021 shows that the contract for the procurement of goods/services with LBD for 11 years reaches Rp 1.27 trillion and requires 40,400 workers. That value is equivalent to 5,055 contracts. He added, as of August 17, 2021, PHR will be included in the centrally integrated vendor database (CVID).

    Thus, PHR and the vendors involved can more easily provide goods/services according to existing regulations. In addition, a one-year mirroring contract is considered important to maintain the continuity of the supply of goods/services until PHR can prepare the needs, including supporting infrastructure. According to the Executive Director of the Reforminer Institute, Komaidi Notonegoro, increasing the involvement of local vendors requires careful and structured planning.

“Procurement of goods/services in upstream oil and gas requires high technology. Currently, goods/services with the same specifications, local players tend to be more expensive,” he said.

    Acting Deputy for Procurement Control of SKK Migas, Rudi Satwiko, stated that contracts and supplies need to be ensured that they are smooth during the transfer of management. Rokan Block production currently contributes 24 percent to national performance. 

    However, the average production has contributed 46 percent. He is optimistic that the potential of this block is still promising and can be one of the pillars to achieve oil production of 1 million barrels per day in 2030.

Kompas, Page-11, Wednesday, August 4, 2021

Pertamina is back in the Fortune Global 500

    PT Pertamina (Persero) re-registered its name as the only Indonesian company to be included in the 2021 Fortune Global 500 list. With a company revenue value of US$ 41.47 billion in the 2020 financial year, Pertamina is in position 287.

"We would like to thank all stakeholders because Pertamina's achievements cannot be separated from the positive support from various parties, both the directors, the board of commissioners and all Pertamina Group employees, as well as shareholders, the government, and the community. This is also an international recognition that Pertamina is equal to other world-class companies," said Pertamina's President Director, Nicke Widyawati.

Nicke Widyawati

    Nicke said, in the challenges of the pandemic since last year, Pertamina faced a triple shock so that it suffered a significant decline in revenue. However, with innovations and business breakthroughs carried out in all business lines and the ongoing organizational transformation, Pertamina was able to increase the company's revenue to US$ 41.47 billion and make a profit of US$ 1.05 billion in 2020. As a BUMN, Pertamina is also consistent. 

Pertamina

    Ensure the supply of energy for the country through various programs, including One Price Fuel, Conversion of Oil to Gas for Fishermen and Farmers, construction of Natural Gas Transmission & Distribution Networks, as well as other downstream infrastructure.

    Through the achievement of Pertamina's operational and financial performance, the total government revenue in 2020 contributed by Pertamina almost reached Rp 200 trillion, namely through tax payments, dividends, Non-Tax State Revenue (PNBP) worth Rp 126.7 trillion, as well as state revenues from oil. The State Shares of Crude and Condensate (MMKBN) from Pertamina's oil and gas blocks amounted to Rp 73.1 trillion.

    With an energy ecosystem that continues from upstream to downstream, Pertamina maintains the survival of 1.2 million direct workers and the multiplier effect on around 20 million workers indirectly. Pertamina's support for the wider community for the recovery of the pandemic also continues to be felt. 

    Starting from the construction of several Covid-19 hospitals, transportation assistance for oxygen distribution, to Pertamina's attention to more than 13,000 MSMEs affected by the pandemic to be able to survive and even upgrade to class.

“The challenges of the Covid-19 pandemic are not light. In addition to strengthening steps to achieve the target market value of US$ 100 billion by 2024, all levels of management and employees remain focused on providing services to the community. We are optimistic that it will continue to grow and continue to provide the widest possible benefits for the community and the country,” said Nicke.

    The Fortune Global 500 ranking is an annual event conducted by Fortune magazine since 1955. The main benchmark is the amount of revenue, including consolidated gross revenue. Other indicators are shareholder equity participation, market capitalization, profits, number of employees, and since 1990 the company's country of origin indicator has also been considered in the Fortune Global 500. Several names of international oil companies are also listed in the 2021 Fortune Global 500 ranking.

    Although financially managed to achieve significant revenues, the company suffered losses. Among them are BP (ranked 18), Royal Dutch Shell (19), ExxonMobil (23), Chevron (75), and Petronas (277). Below Pertamina's ranking, Repsol is in position 381, while from other industries there are Coca-Cola (370), Tesla (392), and Danone (454).

Erick Thohir

Erick: The Form of Hard Work

    Meanwhile, SOE Minister Erick Thohir considered Pertamina's entry into Fortune's list of the world's 500 largest companies as a form of hard work from all elements of the company.

"I am optimistic that Pertamina's performance can be even better. And the frame for Pertamina is to compete with competitors at the world level. Because Pertamina has all the requirements, both quality and capability, to support it as one of the world's big companies," said SOE Minister Erick Thohir.

    Erick views the world's recognition of Pertamina's existence as evidence of ongoing organizational reforms. One of the changes that he considered important as implementing the company's core values ​​that we're trustworthy, competent, loyal, adaptive, and collaborative. So far, Pertamina has never lacked qualified resources.

“But resources without the appropriate value will certainly not be in line with performance. We certainly strive together, so that values ​​that uphold good corporate governance can be the basis. With that, I'm sure performance will follow. Because the results will not betray the process," said Erick Thohir.

    He also highlighted Pertamina's performance from a business and non-business perspective in the midst of the Covid-19 pandemic that is sweeping the world. In the midst of a pandemic that affected the slowdown in the business sector, Pertamina was still able to become one of the driving forces of the economy. Not only that, but Pertamina also plays an active role in efforts to recover from the pandemic from a health perspective.

"Not only performance from the business side, in the current pandemic era we can see the central role of Pertamina through several business lines to support public health. Starting from hospitals, hotels which have been converted as places of isolation and rest for health workers, to actively participating in ensuring the availability of oxygen, "said Erick Thohir.

    Erick hopes that all positive performances, both on the business and non-business sides, can continue to be improved. As a business-oriented company as well as providing services to the public, Pertamina should not be satisfied.

“Our benchmark must be high. So it's not enough just to be in the top 500, we can do even better. Our dream is that Pertamina can become the 50 largest companies in the world and our other SOEs will also enter the top 500," said Erick Thohir.

Investor Daily, Page-1, Wednesday, Aug 4, 2021

Chevron Completes 100 Wells, Pertamina Continues to Drill 130 Wells

    PT Pertamina Hulu Energi (PHE) through its subsidiary, PT Pertamina Hulu Rokan (PHR), will drill 130 wells in the Rokan Block this year, continuing drilling by PT Chevron Pacific Indonesia (CPI) which has reached 100 wells. Wells, drilling is needed to maintain the level of oil production in this oil and gas block.

the Rokan Block Chevron

    PHE Development and Production Director Taufik Adityawarman said optimizing the production of the Rokan Block is one of the strategies to achieve the company's oil and gas production target this year. For this reason, once the management shifts to Pertamina on August 9, it will increase the drilling of wells in this block.

“PHR plans to drill approximately 130 development wells in 2021 which includes the remaining wells from PT CPI. PHR is also preparing approximately 290 wells in 2022. This is the oil and gas block with the highest number of Wells investments," he said at the Upstream Subholding Media Gathering.

    To support the Wells drilling target, the company will also add 10 drilling rigs. So, there will be a total of 16 drilling rigs and 29 rigs for workover and well services operating in the Rokan Block. The procurement of this rig is a mirroring of the previous contract.

    Meanwhile, in its official statement, PT CPI as the existing operator stated that it has completed drilling 100 wells, including 11 conversion wells, in the Rokan Block since the end of December 2020. CPI has also succeeded in adding rigs so that now there are 8 drilling rigs actively operating in the field.

“The Rokan Block is an important strategic asset for state and regional revenues, the community's economy, and national energy security. The collaboration between SKK Migas, PT CPI, and PT Pertamina Hulu Rokan (PHR) is going well so that the drilling program can take place safely and smoothly," said the Director of Rokan PT CPI Budianto Renyut.

Blogger Agus Purnomo SKK Migas

    The Head of Representative for the Special Task Force for Upstream Oil and Gas (SKK Migas) Northern Sumatra Rikky Rahmat Firdaus revealed that his party is committed to assisting, facilitating, and coordinating with stakeholders in the region to complete preparations for the drilling implementation so that it can be carried out smoothly and efficiently. safe.

"It takes full support from all stakeholders from the center to the regions so that the target to maintain and maintain production in the Rokan Block can be achieved. This method will increase state revenue,” said Rikky.

PT CPI

    To ensure the availability of supplies of materials 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. Thus, PHR can begin to import and store materials to support the drilling program in warehouses managed by PT CPI in Duri and Dumai.

PHR

    These materials include pipes, conductors, casings, tubing, wellheads, valves, cables, and bobbing pumps. Currently, a number of PHR materials have arrived at PT CPI's warehouse.

"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 Budianto.

Investor Daily, Page-9-Saturday, July 31, 2021

Accelerating EOR Implementation, Oil and Gas Companies are Encouraged to Partner

    Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif encourages oil and gas companies to cooperate with other parties to realize advanced oil recovery (EOR) activities. The implementation of this activity is one way to achieve the oil production target of 1 million barrels per day (BPD) in 2030.

    Arifin said that accelerating the implementation of advanced production, both secondary and tertiary recovery, needs to be done to achieve the oil production target of 1 million bpd and gas 12 Billion Standard Cubic Feet Per Day/BSCFD by 2030. This acceleration is expected to provide additional contributions to national oil production. For this reason, cooperation contract contractors (KKKS) are encouraged to partner with other parties so that the EOR project can be started immediately.

“To realize the goals in 2030, several EOR projects must be planned and carried out immediately. The government also encourages KKKS to establish strategic cooperation with other parties who have competence and experience in the development and implementation of EOR," said Arifin.

Blogger Agus Purnomo in SKK Migas

    Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said that there were 23 EOR projects scheduled to operate in stages until 2030. Regarding the progress of the EOR implementation, 23 fields are still in the study stage. Meanwhile, one field is working on a field trial and one field is in the process of discussing a development plan (POD).

    Of the 23 EOR projects, most of them are Pertamina Group projects. In detail, PT Pertamina Hulu Rokan will run 7 EOR projects, PT Pertamina EP 2 projects, PT Pertamina Ogan Komering 2 projects, PT Pertamina Hulu Energi North West Java (ONWJ) 2 projects, PT Pertamina Hulu Offshore South East Sumatra (OSES) 2 projects, PT Pertamina Hulu Energi Siak 1 project, PT Pertamina Hulu Mahakam 1 project, and PT Pertamina Hulu Energi Tuban 1 project.

    In addition, BOB Bumi Siak Pusako will work on 1 EOR project, PT Energi Mega Persada (EMP) 1 project, Medco E&P Indonesia 1 project, and Petrogas 1 project. Referring to SKK Migas data, the full scale implementation schedule for these EOR projects is Minas and Batang in 2024, Bekasap and E-main in 2025, Zulu in 2026, Tanjung, Rama, and Handil in 2027, Pedada, Sukowati, Gemah, Melibur, and Walio in 2028, Duri Ring, Bekasap, Kulin, Balam South, Bangko, and Kaji Hopefully in 2029, and Air Serdang, Guruh, Krisna, and Mudi in 2030.

    Previously, SKK Migas Deputy Operations Julius Wiratno said that his party together with Pertamina were finalizing the POD of EOR implementation in the Rokan Block. One of them is the implementation of surfactant EOR in Minas Field, Rokan Block. The POD is targeted to be approved this year as well. If successful, this step is expected to contribute to the production of the Rokan Block in 2023-2024.

Transfer Manage

    Arifin also revealed the importance of proper and effective management transfer of terminated oil and gas blocks in maintaining national oil and gas production this year, which will also have an impact on the 2030 target. For this reason, Arifin reminded SKK Migas to continue to oversee the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia ( CPI) to PT Pertamina Hulu Rokan (PHR) on 8 August.

PT Chevron Pacific Indonesia ( CPI)

"To maintain the level of national oil and gas production, I have a special message that the transfer of management of the Rokan Block is properly guarded so that the transfer of management process can take place smoothly without disturbing the level of oil production in this block," said Arifin.

    He admitted that this year was very challenging for the upstream oil and gas industry. The realization of oil lifting to date is still at 666.6 thousand BPD and gas at 5,430 million standard cubic feet per day/MMscfd. Meanwhile, the target of the State Revenue and Expenditure Budget is 705 thousand BPD for oil lifting and 5,638 MMScfd for gas.

"2021 will be a year of proving the resilience of the upstream oil and gas industry to maintain production," he said.

    Julius had said that his party was optimistic that oil production in the Rokan Block could rise again despite the transfer of management. The reason is, even now, there are indications of an increase in production by carrying out massive Wells drilling during the operatorship transition period. Next year, the production of this block is expected to return to the level of 175-180 thousand BPD.

    The implementation of Wells drilling is one of the nine issues monitored by SKK Migas in the transfer of management of the Rokan Block. Until now, the realization of drilling development wells in the Rokan Block has reached 83 wells from the target of 180 wells this year. Furthermore, the realization of rework (workover) wells as many as 40 wells from the target of 39 wells, and well services (well services) 5,135 activities out of a target of 6,819 activities.

Investor Daily, Page-10, Thursday, July 29, 2021

Protests on Chevron's Waste Scattered in Riau

    Protests due to spilled waste oil in Rokan Hilir, Bengkalis, Siak, and Pekanbaru, West Sumatra continue to spread. Yesterday, it was the turn of the community leader, Arsadianto Rachman, who said that the incident should not be ignored.

    Does this nation want to pass the waste to posterity? It can't be. I will not let that happen,” said the character who is familiarly called Anto Rahman, in Pekanbaru, Riau, yesterday.

Credit Foto : Riau Pagi

    The spilled waste oil is thought to have come from the rest of the production of PT Chevron Pacific Indonesia (CPI). The company is known to end its work contract on August 8. A number of residents whose land was contaminated with waste oil admitted that they had not received compensation and that there was no effort from the company to carry out dialogue.

PT Chevron Pacific Indonesia (CPI)

    Anto, who is also the chairman of the Riau Pancasila Youth Regional Leadership Council, admitted that he had asked the Pancasila Youth ranks from the sub-district level to oversee the waste problem. 

    He also supports the efforts made by the Indonesian Forest Destruction Prevention Agency (LPPHI) which filed an environmental lawsuit to the Pekanbaru District Court on behalf of the residents who were harmed by Chevron.

"This is our joint effort to save the environment, for future generations," explained Anto.

    He hopes that the panel of judges who will hear the environmental lawsuit will side with the community.

"We are confident that the assembly will provide justice for the people of Riau."

the Rokan Block Chevron

    The Riau Environment and Forestry Service noted that Chevron's pollution occurred in community-owned areas and forests. They received 279 public complaints, with a total of 1.6 million hectares of waste contaminated land. Chevron has been operating in the Rokan Block since 90 years ago. If left unchecked, they will walk away on August 8 leaving environmental damage in Riau.

Media Indonesia, Page-7, Monday, July 26, 2021

Post-Transfer of Management, Production of Rokan Block Is Believed to Increase

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) and PT Pertamina Hulu Rokan (PHR) believe that through the efforts that will be carried out after the transfer of management from PT Chevron Pacific Indonesia (CPI) on August 9, 2021, oil and gas production in the Rokan Block in Riau Province will increase.

the Rokan Block Chevron

    This is the conclusion of the discussion on the theme of Maintaining the Reliability of Operations in the Rokan Region, which was held virtually by the Energy and Mining Editor Society (E2S) in Jakarta. 

Blogger Agus Purnomo In SKK Migas

    Appearing as speakers at the discussion was Deputy Head of SKK Migas Fatar Yani Abdurrahman, PHR President Director Jaffee Arizon Suardin, and Secretary-General of the Indonesian Petroleum Engineering Experts Association (IATMI) Hadi Ismoyo.

“All items have been identified. So now the point is, it must be massive, aggressive, efficient, resilient, tough, and out of the box, beyond normal limits," said Fatar Yani.

    Fatar Yani said the longest contributing oil and gas block in Indonesia and still has attractive potential is the Rokan Block. The Rokan Block has been the backbone of national oil production for 70 years since its first production in 1951 by Chevron. The fate of the block has been determined since 2018. At that time it was still a top producer so the transition process began in a long time.

“So this long transition can be done seamlessly and without any problems. The Rokan Block also has potential reserves in unconventional forms. The most widely operated wells in Rokan, there are 10,000 wells, currently, around 8 thousand are operating," he said.

    According to Fatar, the strategy in managing the Rokan block post-transition for the short term in 2021 is to maintain production and a successful transition to PHR, the 2022-2025 period is an effort to increase production with significant investments including the production of Chemical EOR in Minas. The long-term in 2026 is high production according to PHR Rokan's long-term plan (LTP).

“Considering the enormous contribution of the Rokan block, the Government and SKK Migas have paid attention when this block is in the process of transitioning from contractor PT Chevron Pacific Indonesia (CPI) to PHR. To keep the production of the Rokan block high and optimally maintained, a Head of Agreement (HOA) has been signed between SKK Migas and CPI on September 28, 2020," said Fatar.

    On the other hand, the Rokan PSC does not manage ASR backups. Thus, maintaining the production level of the Rokan WK is very dependent on the return of investment costs. The Head Of Agreement (HOA) agreement, it will guarantee the availability of ASR funds and the return of investment costs can be guaranteed. The number of drilling programs during the transfer of management at HOA was 192 wells.

"However, considering the existing developments, the drilling target has not been achieved. SKK Migas has coordinated with PHR to boost well drilling so that the 2021 production and lifting targets can be achieved," said Fatar.

    PHR President Director Jaffee Arizon Suardin expressed his gratitude for the support and contribution of SKK Migas in the transfer of the management process. With the support from SKK Migas, the transfer of management process is more certain and there is a guarantee, this can be seen from the current process which is felt to be very helpful when managed by PHR.

“Drilling is one of the efforts to maintain the production of the Rokan block, from the target of 192 wells that were previously conveyed by the Deputy Head of SKK Migas, which could not be realized by existing operators, PHR will continue, including the wells planned by PHR. We estimate that assuming 70 wells cannot be completed during the transfer of management, the number of wells that can be drilled until December 2021 will reach around 164 wells," said Jaffe.

    Jaffee said the Rokan Block is different from other blocks because it supports 24% of national oil production. And there are 104 fields spread from north to south.

“This is what we have to manage so that production can be maintained. There are nine priority areas of management transfer. We will continue what has not been completed, starting August 9, with the aim that by 2021 the number of wells will not be less than planned," said Jaffee.

    The former Deputy for Planning of SKK Migas also said that PHR would drill and prepare resources for 161 wells with the assumption that 77 wells had not been completed by the existing operator. Currently, preparations are ongoing. Pertamina has prepared around 16-17 rigs and materials. In fact, these rigs and materials can be used before August 9 to help the existing wells that are being worked on by the operator.

"The goal is that the transfer of management process can run smoothly without interruption," he said.

    According to Jaffee, Pertamina is committed to exploring all existing potentials massively, aggressively, and efficiently. And prepare not only wells to be drilled in 2021, but also in 2022.

“Not chasing the number of wells, we want the number of wells to be the least but the production to be the largest. In this block, many wells are needed,” he said.

    Meanwhile, the Secretary-General of IATMI who is also the President Director of PT Petrogas Jatim Utama Cendana Hadi Ismoyo highlighted the distribution of 10% Participating Interest / PI shares to regions through Regional Owned Enterprises (BUMD), including in the Rokan Block later.

“The challenges include the need for oil and gas professionals to implement 10% PI governance. BUMD managers must be slim and agile, as well as fast in making and processing strategic decisions," said Hadi.

    According to him, the current challenge is the fact that on the ground there are many 10% PIs for various reasons that have not been resolved or have not been given to BUMDs in accordance with the mandate of Ministerial Regulation 37, both for technical and non-technical reasons. 

    In addition, the socialization has not reached the root of the spirit of the 10% PI regarding the rights and obligations of each party. There is also a communication leak between operators and BUMD due to different levels of understanding.

Investor Daily, Page-10, Friday, July 23, 2021

To be efficient, the government must help Pertamina

    The government should be able to help PT Pertamina (Persero) to get a contract to purchase crude oil directly from the National oil company/NOC of another country. Direct import contracts are considered more efficient because they can cut the cost of procuring crude oil.

PT Pertamina (Persero)

    The Executive Director of the Reforminer Institute, Komaidi Notonegoro, said that purchasing crude oil directly from NOCs of other countries would cut the supply chain of crude oil. This will have an impact on cheaper procurement costs, so it is positive for Pertamina, the government, and the community as consumers of fuel oil (BBM).

the Nigerian National Petroleum Corporation (NNPC)

    Pertamina's move to buy crude oil directly from the Nigerian National Petroleum Corporation (NNPC) is considered very positive. However, the company needs to be more aggressive in obtaining long-term direct purchase contracts to secure domestic fuel supplies.

“Generally there is state intervention. The agreement will generally be accompanied by bilateral cooperation in the same sector or other sectors," he said.

    Pertamina is not the first time buying Nigerian crude oil. Previously, for the 2017-2020 period, oil imports from Nigeria reached 30% of the company's total imports. This Nigerian oil belongs to the sweet crude category which is in accordance with the company's refinery specifications.

    However, this crude oil is usually marketed in the international market by International Oil Companies (IOCs) with participating interest (PI) in the oil and gas blocks in the country, such as ExxonMobil, Chevron, Shell, Total, and BP. Thus, this is the first time Pertamina has conducted a direct purchase contract with NNPC. In obtaining this contract, Pertamina must compete with 500 companies that register.

    According to Komaidi, the state usually helps its national companies to obtain similar agreements. He gave an example, the United States government does not even hesitate to intervene directly to help business entities originating from their country, even though they are not state-owned enterprises.

"Especially if this is Pertamina, which is a State-Owned Enterprise (BUMN)," he asserted.

    Currently, Pertamina seems to be left to do it alone. Whereas on the other hand, the government assigns and demands a very large tax contribution and Non-Tax State Revenue (PNBP) from the company. 

    Regarding the crude oil import contract with NNPC, Corporate Secretary of PT Pertamina Indonesia Refinery Ifki Sukarya said the volume will adjust to the development of refinery supply and demand in the coming year. This purchase contract is one of the efforts to ensure a sufficient supply of crude oil at the refinery.

"The estimated volume of crude oil supply from NNPC is currently around 900,000 barrels per quarter," said Ifki.

    Previously, KPI's Vice President of Feedstock & Inventory Management, Sani Dinar Saifuddin, said that Nigeria is Pertamina's largest source of crude oil imports. Meanwhile, the largest oil import is the type of Arabian Light Crude from Saudi Arabia's national oil company, namely Saudi Aramco.

Investor Daily, Page-10, Friday, July 23, 2021

Oil and Gas is Still the Mainstay

 

    The oil and gas industry sector is still relied on as one of the supports for depositing state revenues during the ongoing Covid-19 pandemic.

    In the midst of pressures that hit upstream Oil and Gas last year, the Oil industry was still able to provide deposits to the state worth Rp. 70.45 trillion in the form of non-tax state revenues (PNBP).

    This amount is still higher than PNBP from other non-oil and gas Natural Resources (SDA) sectors, namely minerals and coal. In the same period, the mineral and coal sector 'only' provided income to the state of Rp 34.63 trillion.

    Meanwhile, state income from the Oil and Gas sector comes from the state's share of the exploitation results after taking into account the government's obligations in upstream oil and gas business activities in accordance with contracts and provisions of laws and regulations. Income is also obtained from information services for potential auctions of oil and gas working areas and signature bonuses which are the contractor's obligation.

    This year, the dominance of deposits from oil and gas still dominates. The upstream oil and gas sector throughout the first semester of 2021 has supported US$ 6.67 billion or Rp. 96.7 trillion. The realization has even reached 91.7% of the year-long target set in the 2021 State Budget of US$7.28 billion.

Blogger Agus Purnomo in SKK Migas)

    Head of the Special Task Force for Oil and Gas (SKK Migas) Dwi Soetjipto said that the realization of state revenues could not be separated from oil prices which gradually improved after falling in 2020. With current achievements, Dwi believes state revenues from the upstream oil and gas sector by the end of 2021 will reached Rp. 154 trillion.

"ICP prices show an increase, even as of June 2021 reaching the US $ 70.23 per barrel. We will use this momentum optimally to encourage KKKS to be more aggressive in realizing operational activities," said Dwi.

    For your information, the 2021 State Budget sets the ICP assumption this year at US$ 45 per barrel so that the revenue target set has the potential to be exceeded long before the end of the year. Dwi added that the maximum state revenue is also an effort to optimize upstream oil and gas activities and costs. Activities carried out include selecting work order and maintenance priorities, as well as efficiency in operational activities, particularly due to activity restrictions.

"This effort succeeded in bringing the cost per barrel in the first semester of 2021 to US$ 12.17 per barrel of equivalent oil, lower than the first semester of 2020 of US$ 13.71 per barrel of equivalent oil," explained Dwi.

    Meanwhile, Energy Watch Executive Director Mamit Setiawan believes that the Oil and Gas sector is indeed the backbone of state revenue, both in terms of PNBP and taxes. Moreover, oil prices are in a very good position. According to Mamit, to keep this industry in good condition and attractive, there needs to be another relaxation by the government, especially from a fiscal perspective.

“If it is possible to foster an investment climate that leads to an increase in income, especially PNBP, there is nothing wrong with the government reducing its revenue. It is the same when the government makes a decision to reduce revenue when the gas price is US$6 per MMBtu,” he said.

    He added that the government needs to make a few sacrifices so that our investment climate is attractive and attractive compared to other neighboring countries such as Vietnam and Thailand.

"Besides that, I think legal certainty needs to be rushed in relation to the revision of the law which is currently unfinished," said Mamit.

    The founder of the ReforMiner Institute, Pri Agung Rakhmanto, assessed that if you want the Oil and Gas sector to be more useful, it doesn't need to always be directed as a PNBP producer. According to him, the Oil and Gas sector must first be encouraged to become an economic driver in a broad sense.

"From there, a multiplier effect will be generated for the movement of other related sectors, requiring labor which will ultimately increase tax revenue," he said.

ROKAN BLOCK

    In another development, PT Pertamina (Persero) through PT Pertamina Hulu Rokan (PHR) will drill as many as 161 wells after the transfer of management in the Rokan Block which will begin on August 9, 2021.

PHR

    Pertamina Hulu President Director Rokan Jaffee Suardin said in addition to the planned number of Wells drilling this year, his party would continue the drilling commitments that had been signed by PT Chevron Pacific Indonesia (CPI). 

PT Chevron Pacific Indonesia (CPI)

    Jaffee said that there will be an additional 77 Wells from CPI's commitment which will not be completed until the management transfer period on August 9th. In the previous target, Pertamina planned to drill only 84 wells for 2021.

"As of December 161 wells, the target production level is maintained and can increase," said Jaffee.

    According to him, PT Pertamina Hulu Rokan (PHR) has prepared the resources needed to realize the plan. To smooth the Wells drilling plan, as many as 16 to 17 rigs have been prepared. In addition, Jaffee said that human resources and supporting materials have been fully prepared so that when the transition period is over, all activities can start immediately.

“So the goal is that the transfer of management process will run smoothly without any disturbance. We have a target for the lifting to increase with a massive work program," he said.

    Deputy Head of SKK Migas Fatar Yani Abdurrahman said that CPI's failure to achieve drilling during the Rokan Block transition period was due to the difficulty of procuring the number of rigs. According to Fatar, CPI only has about 10 months from signing the investment commitment in the Rokan Block which was signed in September 2020. For the drilling, CPI should have required 10 rigs, but in practice, there are only 6 rigs available.

“Not to mention that the preparation for drilling will take 2 to 3 months. Therefore, we took the initiative to make one program only," he explained.

Bisnis Indonesia, Page-6, Friday, July 23, 2021