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Showing posts with label ENI. Show all posts
Showing posts with label ENI. Show all posts

Petronas Interested in Working on the Masela Block

    The Special Task Force for Upstream Oil and Gas Activities (SKK Migas) stated that a Malaysian oil and gas company, Petronas, expressed interest in working on the Masela Block, replacing Shell, which had left the largest gas project in Indonesia.


    Petronas is also interested in entering into cooperation with Pertamina in terms of replacing Shell if possible. This is the latest development regarding Shell," said Head of SKK Migas Dwi Soetjipto in a hearing with Commission VII.

The Masela Block

    Apart from Petronas, previously there were two companies that were known to be interested in replacing Shell in acquiring a 35% stake in the Masela Block, namely Pertamina and ExxonMobil. Dwi said Pertamina had opened the Masela Block data room this November. It is hoped that Pertamina can submit a Non-Binding Offer to Shell.


    The government is targeting that discussions on the acquisition of Shell's participating interest (PI) in the Masela Block by Pertamina can be completed this year. One of the main conditions for reaching an agreement is the certainty of PI's acquisition value. According to Dwi, Pertamina must find an agreement with Shell to get into the Masela project.


    According to Dwi, Shell already has a minimum value base that must be prepared by Pertamina. This value is the total funds that have been spent by the company while being Inpex's partner in Masela.

Blogger Agus Purnomo in SKK Migas

"Pertamina is negotiating with Shell. SKK Migas monitors and provides direction so that Shell sells at moderate prices. To keep the project going. We wrote to Shell to support the divestment. Around US$1.4 billion has been spent by Shell," Dwi said.

Inpex Corporation

    Meanwhile, for Pertamina, there is ExxonMobil which was also offered by Inpex to conduct the study. SKK Migas said Dwi hopes that there will be opportunities for cooperation between Pertamina and ExxonMobil to open again, instead of the scent of competition. However, it all comes back to the management of each company whether to continue the collaboration as it has been in the Cepu block.

"If all this time ExxonMobil is also conducting studies, it could be a potential collaboration with Pertamina. But we'll see now that each study has its results, whether we want to continue or not," said Dwi.

IDD Project

    Meanwhile, Dwi also stated that the Indonesia Deepwater Development (IDD) project is expected to start running in early 2023, due to the certainty that the replacement operator for PT Chevron Pacific Indonesia will be completed by the end of this year.


“Chevron has decided to leave the IDD project. Now there is a potential replacement. IDD could run next year," said Dwi.

    According to information, an Italian oil and gas company, ENI, is rumored to be controlling 62% of Chevron Pacific Indonesia's (CPI) participating interest in the Indonesia Deepwater Development (IDD) Gas Project. The IDD project has the potential to produce up to 844 million standard cubic feet of gas per day (MMscfd) and 27,000 barrels of oil per day (BOPD). The plan is for the project to be targeted onstream in the fourth quarter of 2027.

Investor Daily, Page-4, Thursday, Nov 17, 2022

SKK Migas Expects Onstream Schedule to Match POD

    The Abadi gas field project in the Masela Block is delayed in production in 2030. Meanwhile, the Special Task Force for Upstream Oil and Gas Business Activities or SKK Migas still hopes that the onstream schedule will match the development plan.

Inpex Masela Ltd and Shell

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) asked Inpex Masela Ltd and Shell as the operator of the Masela Block to carry out the Masela Block Liquefied Natural Gas (LNG) investment in accordance with the approved Plant of Development (PoD). The Masela Block LNG project is agreed to be completed and start production by the end of 2027.

Blogger Agus Purnomo in SKK Migas

    The Deputy of Operations for the Special Unit for Upstream Oil and Gas Business Activities (SKK Migas), Julius Wiratno stated that his party continues to push for the project to be completed in accordance with the approved PoD. SKK Migas also said that it had not yet received a revision proposal from Inpex.


"SKK Migas to this day continues to push for implementation according to the approved PoD, for immediate production as soon as possible. We have not received a revision proposal from Inpex at all and we are still fighting for acceleration efforts," said Julius.

    Julius emphasized that the government through SKK Migas is still encouraging Inpex's investment in Masela, this must be realized immediately. Because some preparatory work has been and is being started, such as the approval of the Environmental and Impact Analysis (AMDAL), metocean surveys, and land acquisition.

Takayuki Ueda

    Previously, Inpex CEO, Takayuki Ueda explained, that Inpex is conducting comprehensive size studies such as the introduction of carbon capture, utilization, and storage facilities, known as CCUS.

the Masela Block LNG

    The CCUS installation is intended to make the Masela Block LNG project more environmentally friendly, but the project could be delayed until 2030.

"SKK Migas has asked Inpex to immediately revise the POD, if that is what is desired, for us the planning team, in particular, can immediately conduct a review and evaluation," explained Julius.

    As is known, currently Inpex Masela Ltd and Shell as the operator of the Masela Block are revising the PoD of the oil and gas working area that is included in the National Strategic Project (PSN). The PoD revision relates to the inclusion of CCUS. This is done so that the assets of the Masela Block in this case the Masela LNG can be said to be competitive because it has green energy requirements.

    The majority of Masela Block's participating shares are 65 percent owned by Inpex Masela. The rest is owned by Shell. But Shell has said it will leave the block. However, the plan failed to materialize because there were no investors who wanted to buy Shell shares.

    In addition to the Masela Block, SKK Migas also hopes that the Indonesia Deepwater Development (IDD) project located in the Kutai Basin, East Kalimantan, can be completed immediately and start production in the fourth quarter of 2025. The IDD project is a development project for five deep-sea gas fields that are carried out in an integrated manner to meet the gas needs of the domestic market and the Bontang LNG Plant. The IDD project has production reaching 844 MMscfd for natural gas and 27,000 barrels of oil per day (BOPD).

the IDD project Chevron

    In the IDD project, Chevron acts as the operator. The company controls 62% of the participating interest or interest (PI). The rest is controlled by ENI with a 20% stake and Sinopec Group 18%. However, the continuation of this mega project is still uncertain. Because, since 2020, Chevron declares to discontinue the IDD project.


"For this IDD project, the update now is that the operator Chevron Pacific Indonesia (CPI) is still looking for a replacement operator," said Julius.


    On the other hand, the government has targeted oil lifting of 1 million BOPD and gas of 12 BSCFD by 2030. However, this target is impossible to achieve without new large-scale oil and gas projects. Previously, the government through the Directorate General of Oil and Gas together with SKK Migas and cooperation contract contractors [KKKS] had identified the planned production profile of each KKKS and it was known that total oil production would reach 1 million BOPD in 2030.

    The government has also prepared several strategies to increase production, namely routine work programs such as infill drilling/step out in existing fields, and workover/well service. In addition, acceleration of the transformation of resources into production is also carried out, by accelerating new PoDs and pending PODs.

    An energy and oil economist from Trisakti University Pri Agung Rakhmanto said that without a new large-scale oil and gas project the oil lifting target of 1 million bopd would not be possible to achieve.

"To achieve the oil and gas production target of 12 MMscfd and 1 million BOPD, there needs to be a new project on a large scale," said Pri Agung.

    According to him, efforts to increase the production of existing oil and gas fields are not sufficient to achieve the government's ambitious targets.

“If it's EOR, we need EOR on a large-scale oil and gas field. The current EOR has just been done on a small scale. EOR and other efforts can only stop the rate of decline in production in existing fields so that it doesn't decline further," he explained.

    Pri Agung is of the view that this 1 million BOPD is not worthy of being called a target because there is no clarity on the details of the work program. For example, from which field the production target was produced.

    The Executive Director of the Reforminer Institute Komaidi Notonegoro also said the same thing. According to him, without finding large reserves, the target of 1 million BOPD is just wishful thinking.

"To be able to reach 1 million BOPD, it is calculated that additional production from large-scale oil and gas fields or the majority is generated from large-scale investments made by major International Oil Companies [IOCs]," said Komaidi.

Jambaran Tiung Biru in Central Java

    Currently, Indonesia has four giant oil and gas projects, namely, Jambaran Tiung Biru in Central Java, the Abadi Field in the Masela Block in the Arafura Sea, IDD in the Kutai Basin in East Kalimantan, and Tangguh Train 3 in Papua. Unfortunately, these projects are expected to be completed longer than the target set. The reason is, recently, the foreign oil and gas giant that manages this mega project has stated that it will leave Indonesia.

Bisnis Indonesia, Page-4, Wednesday, February 23, 2022

Selling Oil and Gas Blocks, Owners Are Still Looking For Strategic Partners

    Sales of oil and gas blocks during the Covid-19 pandemic created challenges. Oil and gas investors who will leave continue to look for buyers who are currently still waiting and see.

    There are four oil and gas blocks that will be sold this year. Namely, Chevron's IDD Block, ConocoPhilips' Corridor Block, Inpex's Masela Block, and Pertamina's Rokan Block on August 9, 2021.

Blogger Agus Purnomo in SKK Migas 

    Head of Program and Communication of SKK Migas Susana Kurniasih revealed, the process of selling oil and gas blocks is still long. The latest update is a notification by ConocoPhilips for a permit request to the Directorate General of Oil and Gas, Ministry of Energy, and Mineral Resources (ESDM) to disclose data. So the process is still early, so far there has been no update on whether there is a follow-up process," said Susana.

    Although the process is ongoing, Susana ensures that activities in Field will continue as usual. Quoted from the official ConocoPhilips website, the participating shares in the Corridor Block are 54% owned by the USA company, the remaining 36% by Talisman, and 10% by Pertamina.

    In 2019, ConocoPhilips signed a gross split cooperation contract to continue the contract in the Corridor Block for 3 years from the end of the contract in 2023. This means that management will continue until 2026 before being continued by Pertamina.

    In the new contract, there is a change in the number of participating shares with the composition of ConocoPhillips (Grissik) Ltd. (46%), Talisman Corridor Ltd. (Repsol) (24%), and PHE Corridor (30%). Participating Interest owned by the holders of interest includes 10% PI which will be offered to Regional Owned Enterprises.

    In addition to the Corridor Block, the oil and gas block divestment action is now taking place in two other blocks, namely Masela and Indonesia Deepwater Development. Of the three, only Block IDD will soon find a replacement partner. Chevron is said to be holding final point discussions with the Italian oil company, Eni.

    Meanwhile, the Rokan Block will also be sold. Pertamina is looking for a strategic partner. Executive Director of the National Oil and Gas Company Association (Aspermigas) Moshe Rizal said that the search for existing partners would likely affect operations. The current condition is not easy to find a replacement partner.

"Hopefully, after conditions improve, it can increase investment interest from outside, because I see that there are many incentives being prepared," said Moshe.

Kontan, Page-12, Thursday, July 22, 2021

Upstream Oil and Gas Insurance Claim Reaches US$ 48 Billion

    Claims paid by insurance consortiums for upstream oil and gas projects carried out by Cooperation Contract Contractors (KKKS) include industrial assets, wells and LNG assets, reaching around US$ 48 billion. In the future, the claim value is expected to increase in line with the improvement in the upstream oil and gas industry triggered by the increase in world crude oil prices.

"Our consortium (Jasindo being the leader) has provided protection for 128 off-shore and on-shore oil and gas blocks. This is a lot, and Alhamdulillah we can carry out our role to protect it very well," said Director of Strategic Business of PT Asuransi Jasa Indonesia (Jasindo), Syah Amandaris in a webinar entitled The Role of Insurance in Supporting Upstream Oil and Gas Activities.

    According to him, the insurance consortium has done a good job of providing protection in every project run by the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) or Cooperation Contract Contractors (KKKS).

"Several incidents that occurred in upstream oil and gas projects have made claims payments to project owners so that the losses experienced can be reduced," he said.

    Meanwhile, the claim value paid by the Insurance Consortium for SKK Migas and KKKS construction projects reached around US$ 524.16 million. He explained that from 2010 to 2021, the consortium, which is also led by PT Jasindo, has paid 121 claims for both assets and construction.

“If the number of claims is detailed, it consists of 97 claims for assets with a value of USD323.32 million. The remaining 24 claims are for construction projects with a value of US$ 200.83 million,” he said.

Blogger Agus Purnomo in SKK Migas

“We consortium play an important role in upstream oil and gas projects. It is conceivable that if the project is not insured, the cost incurred by the state through SKK Migas or KKKS is when undesirable things happen," he added.

    Furthermore, he said, from his experience in handling claims on upstream oil and gas projects, there are three examples of megaprojects whose insurance claims were successfully paid due to interruptions during project execution.

“The first is the Eni Muara Bakau BV offshore project – Jangkrik Gas Field Development Project in 2014 with a claim value of US$ 2.53 billion. Then BP Berau Ltd's offshore and onshore project – LNG Train 3 Tangguh Expansion Project in 2017 with a value of US$ 450 million (offshore) and US$2.5 billion (onshore),” he said.

"Then the onshore project PT Pertamina EP Cepu (PEPC) - Jambaran Tiung Biru Gas Unitization Project with a claim value of US $ 860.87 million in 2017 ago," Aris.

Investor Daily, Page-10, Thursday, July 15, 2021

Increase Investment, Ministry of ESDM Continues to Improve Oil and Gas Data

    The Ministry of Energy and Mineral Resources (ESDM/EMR) continues to improve the subsurface data for oil and gas blocks to attract investment. The reason is that the completeness of the data will increase Indonesia's competitiveness in attracting oil and gas companies to invest in Indonesia.

    Head of the Center for Data and Information Technology at the Ministry of Energy and Mineral Resources (EMR/ESDM), Agus Cahyono, said that the ministry has opened access to oil and gas data for potential investors to attract investment. 

    Completeness of data is also the focus of the ministry. One of them is that the data's completeness can make it easier for potential investors to process 2D seismic data into 3D as strong.

"With more complete data, it provides convenience and completeness for potential investors to conduct regional studies," he said during an online discussion on Ease of Investment and Information Services in the Energy and Mineral Resources Sector held by the Ministry of Energy and Mineral Resources (ESDM/EMR).

    Currently, his party continues to collect seismic data from oil and gas blocks throughout Indonesia. However, he admits that there are indeed obstacles related to data processing, especially those that are still stored in round tape form. The success of reading data on the media is fairly low.

“Really have to be careful and have to go back and forth to retrieve data. And this is a lot of round tape data,” said Agus.

    In addition, he said that data improvement could be pursued from the realization of definite Work Commitments (KKP) promised by oil and gas companies when signing the Production Sharing Contract (PSC). KKP funds can now be used to conduct exploration in open areas, not limited to oil and gas blocks operated by oil and gas companies.

    Pertamina Hulu Energi (PHE) has completed a 2D seismic survey along a length of 32,200 kilometers (km). Currently, the resulting data is being processed through Pseudo-3D Seismic Reprocessing. 

Blogger Agus Purnomo in SKK Migas

    SKK Migas noted that there is exploration potential for Deltaic Deepwater Play in the South Makassar Strait Basin, Pre-Tertiary Play in the North East Java-Makassar Strait Basin, and others. This data will also be open to the public in the future.

    Not long ago SKK Migas also signed an upstream oil and gas exploration cooperation with ENI. With this technology collaboration, SKK Migas hopes to has new oil and gas prospects.

    Regulatory Affairs Committee Indonesian Petroleum Association (IPA) Prana Raditya said oil and gas companies were greatly helped by the government's policy of opening up national oil and gas data. He hopes that the subsurface data on oil and gas blocks can be improved in quality and quantity so that it will increase oil and gas business actors to invest in Indonesia.

“In terms of data, Indonesia is currently competing with other countries. So, the more, complete, and good quality data that can be provided for business actors review, the more attractive Indonesia will be for business actors at home and abroad," he said.

    Thus, the completeness of the data also helps to achieve the target of oil production of 1 million barrels per day (BPD) and gas of 12 billion cubic feet per day by 2030. These data on oil and gas blocks are summarized in the Oil and Gas Data Repository (MDR). 

    Not only data related to oil and gas potential in one area but the MDR is also equipped with supporting data, such as area boundaries, availability of age infrastructure, geological vulnerability, to whether it is included in forest land. Investors can access all the data for free by registering to become a member.

Investor Daily, Page-10, Wednesday, July 7, 2021

Seven Upstream Oil and Gas Projects Worth US$ 1.45 B in Operation

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that as many as seven upstream oil and gas projects from the target of 12 projects this year have been operating (on stream). The investment value of these seven projects reaches US$ 1.45 billion or equivalent to Rp. 21.12 trillion.

    The seven upstream oil and gas projects are the Belato-2 Early Production Facility (EPF) project by PT Seleraya Merangin II, Enhanced Oil Recovery (EOR) for the Jirak Field by PT Pertamina EP, and gas supply to the Balikpapan Refinery by PT Pertamina Hulu Mahakam (PHM).

    Next are the development of the KLD Field by PT Pertamina Hulu Energi Offshore North West Java (ONWJ), the West Pangkah Field by PT Saka Energi Indonesia, the Merakes Field by Eni East Sepinggan, and the North Area Field by Jindi South Jambi Block B.

    The seven projects produce oil production of 9,850 barrels per day (BPD) and gas of 474.5 million standard cubic feet per day/MMscfd. Thus, the successful completion of these seven projects can reduce the rate of natural production decline that occurs.

Blogger Agus Purnomo in SKK Migas

“The activities carried out have successfully completed 58.3% of the target. We are optimistic that all of the upstream oil and gas projects targeted by 2021 can be completed because the other five projects are in process and are still in accordance with the plan," said SKK Migas Deputy Operations Julius Wiratno.

    In the midst of the economic situation that has not yet recovered due to the Covid-19 pandemic, the realization of these upstream oil and gas projects is able to create new jobs and support the movement of the regional economy. 

    In addition, this project also supports national and regional companies to be able to continue to survive and maintain business continuity. For this reason, his party together with the cooperation contract contractors (KKKS) are trying to accelerate the work on the project which is scheduled for 2022.

"Hopefully something can be accelerated this year, so hopefully the number of onstream projects can exceed this year's target and support an increase in production next year," said Julius.

    This has been facilitated by the development of the Integrated Operation Center (IOC) facility. With the IOC, it can improve supervision and facilitate operational flexibility to achieve national oil and gas production targets. This is because the IOC allows SKK Migas to carry out 24-hour real-time surveillance.

    His party also anticipates the movement of people and goods in the midst of tightening mobility policies to prevent the spread of the Covid-19 pandemic. This is to ensure the availability of goods or services to support production operations in the field according to the timetable.

"To maintain the smooth mobility of upstream oil and gas goods and workers, we continue to coordinate with related parties so that production operations continue normally," said Julius.

    Acceleration of the vaccination program must also be carried out in line with government programs.

"So, we hope to keep the confirmed cases of Covid-19 under control in upstream oil and gas. SKK Migas also continuously coordinates with KKKS (cooperation contract contractors) to ensure that the health protocols have been implemented as well as possible so that production stops do not occur due to the increasing number of Covid-19 cases," said Julius.

    In the upstream oil and gas environment itself, the rate of increase in confirmed cases of Covid-19 actually tends to be sloping compared to the end of 2020 to the first quarter of 2021. However, his party still anticipates the potential for an increase in cases due to social interactions during Eid al-Fitr yesterday. 

Jambaran Tiung Biru (JTB) gas Project

    Julius added that this year, one of the upstream oil and gas projects included in the national strategic project (PSN), namely Jambaran Tiung Biru (JTB), is scheduled to start operating. 

    He is optimistic that this target can be achieved. Moreover, the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif and the Head of SKK Migas Dwi Soetjipto have directly reviewed the work on this project.

Investor Daily, Page-10, Thursday, July 1, 2021


    The operating schedules of a number of upstream oil and gas projects were forced to be postponed due to the Covid-19 pandemic which still creates uncertainty in the sector. It is hoped that the fulfillment of the needs for the downstream sector will not be disrupted. One of the delays in the operation schedule was the Tangguh Train-3 National Strategic Project (PSN).

Blogger Agus Purnomo in SKK Migas

    Deputy for Special Task Force Operations (SKK Migas) Julius Wiratno said the completion of the project would miss the target in the fourth quarter of 2021 to next year.

    According to him, at the beginning of this year, the project had been suspended for 3 months due to the spread of Covid-19. To resume the project, it will take longer.

“Probably around mid-2022. We are currently doing a schedule and risk analysis. We'll see if it can be fixed," he said.

    Based on SKK Migas records as of March 26, 2021, the progress of the Tangguh Train-3 onshore project in Papua still reached 89.58% or lower than the target, which was 96.21%. Meanwhile, the offshore project work on Tangguh Train-3 has reached 99.19% of the target that should have been 100%.

the Jambaran-Tiung Biru (JTB) gas project

    In addition to the Tangguh Train-3 project, a scheduled shift has also occurred in the Jambaran-Tiung Biru (JTB) gas project. Julius said the ongoing Covid-19 pandemic coupled with the second wave which worsened conditions at home made the project. SKK Migas will oversee these projects so that they can be completed by the end of the year.

“The JTB project has been pushed back from August to November or December 2021 onstream. There is still uncertainty because of this Covid," he said.

    Overall, to date, SKK Migas has successfully completed seven upstream oil and gas projects from the target of 12 onstream projects in 2021.

    Investments in the seven projects were recorded at US$ 1.45 billion and provided additional production of 9,850 barrels of oil per day (bopd) and 474.5 million cubic feet of gas per day (MMscfd).

    The seven upstream oil and gas projects that are already onstream are EPF Belato2 Seleraya Merangin Dua, EOR Jirak Pertamina EP, KLD PHE ONWJ, Gas Supply to RU-V Pertamina Hulu Mahakam, West Pangkah Saka Indonesia Pangkah Ltd, Merakes Eni East Sepinggan, and North Area Jindi. South Jambi Block B.

    Meanwhile, in line with upstream oil and gas activities and the tightening of government policies to implement efforts to prevent the Covid-19 pandemic, the upstream oil and gas business is also taking anticipatory steps in order to continue to achieve the target. One of the anticipatory measures taken is the acceleration of the vaccination program which is carried out together with government programs.

"SKK Migas also continuously coordinates with KKKS to ensure that the health protocols are implemented as well as possible so that production does not stop due to the Covid-19 case," he said.

    Julius added that the movement of people and goods needs to be added to ensure the availability of goods or services to support production operations on time.

"We are working on accelerating projects launched in 2022. Hopefully, something can be accelerated this year, so hopefully, the number of projects that can onstream can exceed this year's target and support an increase in production next year," he explained.

    Energy Director Watching Mamit Setiawan assessed that the delay in the streaming schedule for oil and gas projects was not entirely the fault of the contractor.

"The contractors must have made changes to their plans from last year with the hope that the pandemic can subside this year and fabrication activities can operate normally in manufacturing companies, but it seems that it failed to meet the target," said Mamit.

    However, he hopes that the preparation of the goods will not take too long, especially if the project is a PSN. Especially for JTB, it doesn't really matter if the project is planned. Surprisingly, the demand for gas for the industry in East Java currently tends to below.

    Executive Director of the National Oil and Gas Company Association (Aspermigas) Moshe Rizal assessed that the Covid-19 pandemic had indeed caused a lot of uncertainty. Moreover, there is a policy to make it difficult for KKKS to achieve the required productivity.

“It's really difficult because of the number of personnel in the field and travel restrictions. This all hampers productivity. Although the goods are available but not optimal, "he said.


    Meanwhile, the Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources stated that investment in the upstream oil and gas sector is still below the target.

    Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Tutuka Ariadji, said the Covid-19 pandemic had a major impact on the domestic oil and gas industry. This causes oil and gas investment to be slow. Meanwhile, this year's investment in the upstream oil and gas sector is targeted at US$12.4 billion. He said that until June 2021, the realization of the investment was less than half of the target.

"In this month or May-June 2021, upstream oil and gas investment is 25.52 percent of the 2021 target," he said.

    Tutuka said the government continues to strive to improve services and ease of doing business in the domestic upstream oil and gas sector. He said the government had issued a number of regulations that would support this facility.

    He explained that the government had made a policy to increase the use of domestic products in upstream oil and gas activities, namely the Minister of Energy and Mineral Resources Regulation No. 15 of 2013, and the Minister of Energy and Mineral Resources Regulation No. 14 of 2019, as well as the Minister of Energy and Mineral Resources Regulation No. 17 of 2018.

"The oil and gas sector is one of the natural resources that is multifunctional and plays a major role in the country and contributes to the growth of national income," said Tutuka.

Bisnis Indonesia, Page-4, Thursday, July 1, 2021

Merakes Project Ready to Supply Domestic Gas

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

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

the Merakes Field by ENI

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

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

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

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

Blogger Agus Purnomo in SKK Migas

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

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

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

Uncertainty Still Looming


    High uncertainty still overshadows many upstream oil and gas projects which are targeted to operate this year. Apart from the prolonged impact of the pandemic, the fluctuating factor in world oil prices also makes the prospect always combined with risk.

Blogger Agus Purnomo in SKK Migas

    Based on the records of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), this year it is targeted that as many as 12 projects will be on stream with a total project value of US $ 1.62 billion.

    During the first quarter of 2021, there were 4 onstream projects with a total investment of US $ 111 million, increasing oil and gas production by 5,850 barrels of oil per day (BOPD) and 69.5 million standard cubic feet per day (MMscfd).

    These projects include Gas Supply to RU-V Pertamina Hulu Mahakam, Belato Field by Seleraya Merangin Dua, and the KLD PHE ONWJ project, West Pangkah Saka Indonesia Pangkah.

    Executive Director of the National Oil and Gas Companies Association (Aspermigas) Moshe Rizal is optimistic that the cooperation contract contractors (KKKS) can be more active this year and increase their investment to catch up with last year's lagging performance.

    KKKS will focus on commercially faster projects so that the possibility of project delays this year can be minimized. In the latest development, the Merakes field in the East Sepinggan Working Area has been included in the onstream project after being delayed last year. National gas production is projected to increase by 368 MMscfd.

    It is admitted that realizing the project with a total investment of US $ 1.3 billion located in the Makassar Strait requires extra efforts due to the impact of the Covid-19 pandemic that has emerged since early 2020.

"This project was initially targeted to get onstream faster in the third quarter of 2020. It turns out that we have to shift slightly from the onstream plan that is in the POD approval to the first quarter of 2021, "said the head of SKK Migas Dwi Soetjipto.

    The important thing from the development of Merakes Field is the ability to synergize to improve the economy in the field. The proximity of the Merakes field discovery to the Jangkrik Lapanga Floating Production Unit (FPU) allows Eni to maximize synergies with the closest existing infrastructure to improve the economics of the Merakes Field. You do this by using a shared facility sharing scheme.

the Merakes field by ENI

    The Merakes Field development project is a deep-sea project where the depth is about 1,500 meters below sea level. This project has 5 production wells with a total production capacity of 450 MMSCFD or the equivalent of 85,000 barrels of oil equivalent per day (BOEPD).

    The production contribution from the Merakes field will increase the gas supply for East Kalimantan Province. Most of it will be prioritized for domestic consumers, including the fertilizer and electricity industry in East Kalimantan, and processed at the Bontang Refinery into LNG.

"We hope that with the certainty of gas supply for the industry, it will provide a bigger multiplier effect for the national economy," Dwi said.

    According to him, this year there are two national strategic projects targeted onstream, namely Jambaran Tiung Biru with a total investment of US $ 1.53 billion. If it operates commercially, it is projected to increase national gas production by 190 MMscfd.

    Tangguh Train-3 Papua is also scheduled to go on stream in the fourth quarter of 2021 with estimated additional gas production of 700 MMscfd and a concentrate of 3,000 barrels of condensate per day (BCPD).

    This US $ 8.9 billion projects was delayed from the previous target in the third quarter of 2021 to the fourth quarter of 2021. With the support of these projects, it is hoped that investment in the upstream oil and gas sector this year can be better than last year's US $ 10.21 billion from the 2020 target of US $ 12.1 billion.

"We hope that the investment in the upstream oil and gas sector at the end of the year can be greater than 2020. The amount of realization in the first quarter of 2021 is the US $ 2.4 billion, then for revenue in the first quarter of 2021 it will reach US $ 6.67 billion."

    Energy Watch Executive Director Mamit Setiawan said these expectations can be achieved as long as a number of important conditions are met. For example, related to the development of world oil prices, ease of carrying out work during a pandemic, full support from stakeholders, and solid cooperation at the regional level.

Bisnis Indonesia, Page-2, Friday, April 30, 2021.

Caring for Production Increase expectations


    The national fuel consumption which is projected to continue to increase makes the target of oil production of 1 million barrels per day and gas of 12,000 MMscfd in 2030 to be crucial at a time when Indonesia's efforts to build energy independence.

    Meanwhile, Indonesia is still the country with the largest oil imports in Southeast Asia due to the increasing domestic consumption of oil and gas without a significant increase in production.

    In the last 2 decades, the discovery of new oil reserves has been classified as minimal and Indonesia still relies on old wells that have not been explored. As a result, the government must import oil and gas to meet domestic energy needs, which often creates a trade balance deficit.

    In the next 10 years, petroleum consumption in Indonesia is projected at 2.27 million barrels per day (BPD) and natural gas consumption of around 11,728 MMscfd. This number has almost doubled compared to last year's consumption of around 1.66 million BPD of oil and 6,557 MMscfd of gas.

    On the other hand, the government's efforts to increase oil production to 1 million BPD and gas to 12,000 MMscfd are still fraught with a number of challenges. One of them is the Covid-19 pandemic which has had a negative impact on the upstream oil and gas industry.

Blogger Agus Purnomo in SKK Migas

    Secretary of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Taslim Z. Yunus said Indonesia's upstream oil and gas industry was influenced by global conditions caused by the level of control of the Covid-19 pandemic, fluctuations in world oil prices, and global investment trends.

    According to him, a tough challenge for the upstream oil and gas industry is the massive impact of Covid-19 which has caused oil prices to fall. As a result, production has also decreased, because oil and gas companies tend to reduce their investment.

    Last year, a number of international oil and gas companies that cut their investment were ExxonMobil by 30%, Shell by 20%, Chevron 20%, BP 25%, and Eni 255.

"What they need is to compete with other countries from the IRR, then the future trend is to look at environmentally friendly energy because from a social point of view it will be easier," he said.

    Meanwhile, SKK Migas has prepared four strategies to increase national oil and gas production as well as towards the 2030 production target, namely by optimizing production in existing fields, transforming resources into production, accelerating chemical Enhanced Oil Recovery (EOR), and exploring major discoveries.

    The long-term strategy will go through two stages to curb the rate of decline in production and increase production.

"The first and second strategies are to hold down the rate of production, while the increase in production will result from the EOR and exploration strategies," he explained.

    Head of SKK Migas Dwi Soetjipto added that investment needs will continue to increase for the next 10 years in order to pursue the oil production target of 1 million BPD and gas of 12,000 MMscfd. The investment is set at the US $ 187 billion.

    Dwi said that besides being attractive to investors, the target could provide a multiplier effect in the form of the gross revenue of US $ 371 billion with state revenues of US $ 131 billion in 2030. In addition, with money circulating from upstream oil and gas projects and open job opportunities, it will have an impact. both for the national and regional economies.

    Nevertheless, there are several challenges that need to be resolved domestically, namely the complexity of licensing, overlapping regulations between the central and regional governments, an unattractive fiscal regime, data unavailability, constraints in the area of ​​operation, land acquisition constraints, the longer oil and gas monetization process. and fear of making decisions, in this case, the criminalization of policies.

    Meanwhile, Ronald Gunawan, President Director of PT Medco E&P Indonesia, said 2020 was a difficult year for the upstream oil and gas industry. The Covid-19 pandemic has suppressed the performance of cooperation contract contractors (KKKS).

    According to him, the world oil price dropped drastically in the last year and followed by low natural gas prices made the upstream oil and gas sector languish. However, with efforts escorted by the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), operational activities can continue in the midst of a pandemic.

"SKK Migas support is very good. Hence, the operations of the KKKS are a little disrupted but not significant, ”he said.

Ronald said the vision to pursue the oil production target of 1 million BPD and 12,000 MMscfd of gas by 2030 has become a joint commitment of the government, SKK Migas, and KKKS.

    Meanwhile, since 2015 Medco has continued to increase its oil and gas production levels from the range of 56,000 barrels of oil equivalent per day (Mboepd) to reach the level of 100,000 Mboepd in 2020.

    According to him, the Covid-19 pandemic provides new lessons for running operations more efficiently. With a 20% reduction in capital expenditure or capital expenditure, Medco is still able to record an increase in production amid the pandemic.


    An energy observer who once served as Governor of Indonesia for OPEC, Widhyawan Prawiraatmadja, said that there needs to be an incentive provided by the government to be able to pursue the target of increasing oil and gas production.

    He said that it is possible to increase oil and gas production again in Indonesia. He gave an example that other countries, such as the United States and Mexico, had successfully implemented reliable technology, improved fiscal policy, and improved the business climate in an integrated manner.

"We have to do something drastic, the fiscal term must be the same as in other places. "The higher the spend, the higher the chances of getting the giant, this has been proven in Mexico," he said.

    Meanwhile, a Member of the National Energy Council, Satya Widya Yudha, said that in the context of energy security, the government needs to pay attention to affordability.

    Therefore, fossil energy will still be very dominant in the future, but still paying attention to environmental factors that will be supported by technology.

"So if our renewable energy is still less affordable, as a whole people will go to fossils, the world will go to fossils," he said.

Bisnis Indonesia, Page-4, Thursday, April 29, 2021.

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