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

    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.

ExxonMobil

    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.

Shell

    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

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

ENI

    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

Petronas Becomes Pertamina's New Competitor in the Masela Block

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) said that a new competitor in the takeover of Shell Upstream Overseas Ltd.'s 35% stake has decided to leave the Masela Block.

Petronas

    The presence of Petronas has increased the number of potential investors in the Masela Block. Because, previously, Pertamina-INA-Medco and ExxonMobil were reportedly interested in taking over Shell shares. Deputy Head of SKK Migas Fatar Yani Abdurrahman revealed that Petronas has just expressed its interest in replacing Shell in the Masela Block.

the Masela Block

"After someone made an offer, Petronas was interested in joining, but we are currently studying it. We will discuss this," said Fatar.

    Currently, Petronas is only waiting for the government's commitment. However, SKK Migas cannot confirm whether Petronas will enter with partners or alone. What is certain, "Petronas has expressed its interest in investing in this LNG project with a capacity of 9.5 million tons per year," said Fajar.

Blogger Agus Purnomo in SKK Migas

    SKK Migas previously targeted Pertamina to submit an offer to Shell for the acquisition of a 35% stake in the Masela Block this November.

    Until now, the filing of this interest has not been carried out. Pertamina's consortium is currently still being evaluated with various options.

    Potential replacement investors for Shell in the Masela Block must invest around US$ 1.4 billion if they are interested in taking over shell shares. The amount of this investment does not include the funding requirement of US$ 6.3 billion for the first five years of development as capital expenditure.

    In addition, with the addition of the Carbon Capture Utilization & Storage (CCUS) project to the Masela project, there is a potential for additional investment of around US$ 1.2 billion to US$ 1.4 billion.

    Fatar emphasized that learning from Shell's release in the Masela Project, SKK Migas is prepared to strengthen the existing provisions in the future oil and gas block Plan of Development (PoD).

sHell

    Fatar revealed that SKK Migas felt like it had been lied to by Shell leaving the Masela Block. Moreover, "When the POD, we provide incentives, but the conditions are poor. For example, until the commercial production is not allowed to leave the Masela Block," said Fatar.

    The Masela Block project is the first very large-scale project in Indonesia. This also makes the government happy. But unfortunately in the terms and conditions of the contract, there is no protection for the project so that investors don't just run away.

    So, in the future, SKK Migas is targeting regulations to provide protection so that investors do not leave the project until the commercial production stage. This provision applies to projects that receive incentives. As a result of Shell's escape, the construction and development of the Masela Block was delayed. Moreover, the release of management shares or Shell's participating interest requires approximately 18 months for a 35% stake in the Masela Block.

Kontan, Page-12, Wednesday, Nov 16, 2022

Pertamina Synergizes with ExxonMobil

 

    Erick Thohir wants SOEs to follow the principles of a green economy in transforming their business.

Erick Thohir

    PT Pertamina Holding synergizes with ExxonMobil in the development of carbon capture and utilization and storage (CCUS) technology. The cooperation was carried out by Pertamina in line with the business transformation steps towards a green economy.

“The application of CCUS technology is part of Pertamina's energy transition to clean energy agenda.

Nicke Widyawati

    This low-carbon technology will support Pertamina's business sustainability in the future," said Pertamina President Director Nicke Widyawati.

    Nicke and ExxonMobil Indonesia President Irtiza H Sayyed have signed a memorandum of understanding at the United Nations Climate Change (PEB) Summit in Glasgow, Scotland, Monday (Nov 1, 2021).

    Nicke said the challenge in developing CCUS lies in the large investment value and the economic value that is not yet ideal. In responding to this challenge, Pertamina continues to synergize and cooperate with various world oil and gas companies so that it can accelerate the implementation of CCUS through technology transfer, joint development, and increased capacity building. Together with ExxonMobil, Nicke added, Pertamina will also develop the application of low-carbon technology to achieve net-zero emissions in promoting global climate goals.

    Nicke explained that the CCUS technology was applied through the application of a carbon dioxide (CO2) injection process into the subsurface layer to be applied in depleted reservoirs in Pertamina's working area, as well as assessing the potential for hubs and cluster schemes. Nicke said Pertamina had initiated several CCUS projects in the oil and gas field with the potential to reduce carbon dioxide up to 18 million tons in relation to reducing emissions in the upstream sector.

    One of the CCUS technology developments was carried out in the Gundih Field, Cepu, Central Java, which is integrated with Enhanced Gas Recovery (EGR) technology and has the potential to reduce around 3 million tons of CO2 in 10 years, including increasing oil and gas production. Nicke said the project is planned to be operational in 2026.

ExxonMobil

    Nicke added that Pertamina and ExxonMobil will also study the sharing of technical subsurface data needed for the assessment of subsurface formation as a place to store CO2 and its characteristics at certain locations in Indonesia. The two companies will also review the sharing of infrastructure data including data on pipelines, facilities, and wells to evaluate the reuse of existing infrastructure for transportation. 

    Nicke said the government has set a roadmap for the transition of energy from fossil to new and renewable energy that is in line with the principles of energy security, accessibility, and affordability.

"From that perspective, Pertamina will continue to strive for a balance between the climate change agenda and energy security in Indonesia and also for the company's sustainability," said Nicke.

State-Owned Enterprises (BUMN)

    The Ministry of State-Owned Enterprises (BUMN) continues to encourage Pertamina to synergize with various parties, including global companies in the development of CCUS technology.

"This CCUS collaboration is a step to make it happen. This partnership is very important to reduce the effect of greenhouse gases and increase the national oil gas production capacity," said SOE Minister Erick Thohir.

    The Ministry of SOEs has also introduced a sustainable policy, namely an environmentally friendly lifestyle (eco-lifestyle). Erick said the policy was aimed at creating a better place for the future generation of Indonesia through green energy initiatives.

Credit Photo by Christopher Furlong / POOL / AFP

President Joko Widodo - PM Boris Johnson

    In a bilateral meeting between President Joko Widodo (Jokowi) and British Prime Minister (PM) Boris Johnson on the sidelines of the COP26 World Leaders Summit, at the Scottish Event Campus, Glasgow, Scotland, Monday (1 Nov 2021), Erick said, international trust The positive projection of Indonesia's economic growth in the future must be responded with full responsibility.

    According to Erick, the plans of several countries to invest to develop and accelerate the green economy in Indonesia will be a challenge for SOEs. Erick said that if President Jokowi emphasized green investment and technology as the key to the green economy transition, Johnson conveyed the UK's interest in investing in the form of export credits that could be used for the green economy transition.

    Erick sees this as an opportunity that must be implemented so that the transformation carried out by SOEs must uphold the principles of clean energy transformation while accelerating the green economy.

"I hope that our energy SOEs, such as PLN, Pertamina, and the mineral and coal industries can respond and carry out the transformation of clean energy and reduce carbon emissions. After all, this is a shared responsibility for the sustainability of our environment," said Erick.

    Erick added that SOEs' intensive efforts to transform by carrying out various programs and business model innovations must view the responsibility to reduce emissions not as a burden, but also as an opportunity to carry out a low-carbon economic transformation.

Republika, Page-9, Thursday, Nov 4, 2021

Pertamina Cooperates with ExxonMobil to Develop Low Carbon Technology

 

    PT Pertamina and ExxonMobil are collaborating on the application of low-carbon technology and Carbon Capture and Utilization and Storage (CCUS). This collaboration will strengthen the sustainable strategic partnership between PT Pertamina and ExxonMobil that has existed since the 1970s in the upstream sector and also in the downstream sector some time ago.

Nicke Widyawati

    Pertamina President Director Nicke Widyawati and ExxonMobil Indonesia President, Irtiza H. Sayyed have signed a memorandum of understanding witnessed by the Coordinating Minister for Maritime Affairs and Investment of the Republic of Indonesia, Luhut Binsar Panjaitan, Coordinating Minister for Economic Affairs Airlangga Hartarto, SOE Minister Erick Thohir, and Deputy SOE Minister Pahala N. Mansury and Minister of Energy and Mineral Resources Arifin Tasrif, Monday (1 Nov 2021) at the United Nations Climate Change Summit in Glasgow, Scotland, which will take place 1-10 November 2021.

    The application of CCUS technology is part of Pertamina's energy transition to the clean energy agenda. This low-carbon technology will support Pertamina's business sustainability in the future," said PT Pertamina President Director Nicke Widyawati.

    The challenge in developing CCUS lies in the large investment value and the economic value that is not yet ideal. In responding to this challenge, Pertamina continues to synergize and cooperate with various world oil and gas companies so that it can accelerate the implementation of CCUS through technology transfer, joint development, and increased capacity building.

    Together with ExxonMobil, Pertamina will develop the application of low-carbon technology to achieve net-zero emissions in promoting global climate goals. CCS technology is applied through the application of a CO2 injection process into the subsurface layer to be applied to depleted reservoirs in Pertamina's working area, as well as assessing the potential for hubs and cluster schemes.

Investor Daily, Page-10, Wednesday, Nov 3, 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

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

Pertamina Imports Crude Oil from Nigeria

    PT Pertamina (Persero) through PT Pertamina International Refinery (KPI) received a crude oil procurement contract from Nigeria. The import of crude oil was obtained by Pertamina from the Nigerian National Petroleum Corporation (NPCC).

NPCC

    Director of Feedstock and Product Optimization of KPI Yoki Firmandi said this is the first direct contract between Pertamina and NPCC, although Pertamina often buys Nigerian oil. So far, Pertamina has had to buy Nigerian crude oil through the international open market that has a Participating Interest, such as ExxonMobil, Chevron, Shell, Total, and BP.

Pertamina

"With Pertamina's direct deal with NPCC, the procurement process can take place more efficiently. Of course, getting a contract directly will be more efficient. This is in accordance with the refinery feedstock optimization plan in the future,” said Yoki.

    Pertamina was selected as an awardee from a total of 500 companies that registered. NNPC is a Nigerian National Oil Company, like Pertamina in Indonesia. The direct supply contract is very important for bilateral relations between the two countries. Yoki said that Nigerian crude oil is sweet crude.

    This direct contract has a duration from 2021 to 2023. Yoki explained that KPI was not alone in getting this direct contract. Purchasing crude oil directly to the NPCC is expected to increase the efficiency of purchasing crude oil directly to oil producers.

    KPI synergizes with Subholding Shipping PT Pertamina International Shipping (PIS) in terms of transportation. PIS has just launched two new Very Large Crude Oil Carrier (VLCC) vessels, namely MT Pertamina Prime and MT Pertamina Pride. Later the oil will be transported by a ship owned by PIS.

VLCC MT Pertamina Prime

    In addition, Pertamina International Marketing & Distribution, Pte Ltd (PIMD) under Subholding Commercial and Trading also played a role in supporting KPI in obtaining the contract. Vice President of Feedstock and Inventory Management KPI Sani Dinar Saifuddin said Nigerian oil has a large portion of Pertamina's oil import volume. In the 2017-2020 period, 30 percent of the volume of imported crude oil came from Nigeria. Pertamina's crude imports in 2019 amounted to 75.3 million barrels.

"Nigeria is Pertamina's second-largest source of crude oil imports, after Arabian Light Crude supply to FOC I RU IV Cilacap from NOC Saudi Arabia Aramco," said Sani.

 

Aramco

    Meanwhile, crude oil imports this year are projected to increase significantly compared to 2020. According to Pertamina's 2021 projection data, crude oil imports are targeted to reach 118.4 million barrels, an increase of about 50.4 percent compared to last year's crude oil imports which were only 78.7 percent. million barrels.

Nicke Widyawati

    Pertamina President Director Nicke Widyawati said Pertamina needed to maximize the refinery processing capabilities that needed to be supplied with oil. In addition, there was a decrease in GOI entitlement due to the still low Indonesian oil price (ICP).

"We have an increase in imports of 39.7 million barrels," said Nicke.

    Previously, Nicke projected that the volume of crude oil imports this year would increase to 118.4 million barrels. This projection is up 50.4 percent from the realization of crude oil imports throughout 2020 which reached 78.7 million barrels. The increase in crude oil imports is part of Pertamina's refinery optimization strategy.

Republika, Page-9, Wednesday, July 14, 2021

Pertamina Imports Crude Oil Directly from Nigeria

    PT Pertamina (Persero) through PT Refinery Pertamina Internasional (KPI), managed to get a contract to import crude oil directly from the Nigerian national oil and gas company, namely the Nigerian National Petroleum Corporation (NNPC). This direct contract makes the cost of procuring crude oil more efficient. 

the Nigerian National Petroleum Corporation (NNPC)

    In general, Nigerian crude oil is marketed in the international market by the International Oil Company (IOC) which has Participating Interest (PI) in the oil and gas blocks in the country, such as Exxon Mobil, Chevron, Shell, Total, and BP. The direct agreement between Pertamina and NNPC makes the procurement process more efficient.

"Of course, getting a direct contract will be more efficient which is in line with the refinery feedstock optimization plan in the future," said KPI's Director of Feedstock & Product Optimization Yoki Firnandi.

    The crude oil import contract with NNPC is valid from this year until 2023. The entire supply of oil is to meet the feedstock needs of Pertamina's refineries. 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 following Pertamina's refinery specifications.

Aramco

"Nigeria is Pertamina's second-largest source of crude oil imports, after Arabian Light Crude supply to the Cilacap Refinery from Saudi Arabia's NOC (national oil company/national oil company), Aramco," said Pertamina's Vice President of Feedstock & Inventory Management, Sani Dinar Saifuddin.

    To get the supply of Nigerian crude oil, Pertamina must compete with 500 companies that register. The direct contract with NNPC is Pertamina's first achievement. Pertamina International Marketing & Distribution Pte Ltd (PIMD) under PT Pertamina Patra Niaga as Subholding Commercial Marketing also supported KPI in getting the contract.

the Pertamina Prime VLCC

    Later, the transportation of crude oil from Nigeria will be carried out by PT Pertamina International Shipping (PIS). Moreover, PIS has completed the procurement of two very large crude carriers (VLCC), namely the Pertamina Prime and Pertamina Pride tankers.

Nicke Widyawati

    Previously, Pertamina President Director Nicke Widyawati said that after forming the sub-holding, subsidiaries were given the freedom to formulate types of crude oil that could produce good quality and better yields of valuable products. So, her party decided to use imported crude oil more. 

    Referring to Pertamina's data, imports of crude oil this year will reach 118.4 million barrels, up 39.7 million barrels or 50.44% from last year's imports of only 78.7 million barrels. Crude oil imports in 2021 are also much higher than imports in 2019 which amounted to 86.9 million barrels.

    This strategy can also reduce the trade balance deficit. This is because the price of imports is lower than the price of Indonesia's oil exports. The average purchase of crude oil imports this year is US$ 57.8 per barrel, while Indonesia's average oil exports reach US$ 59.8 per barrel. She estimates that there will still be a surplus of US$ 75 million.

Investor Daily, Page-10, Tuesday, July 13, 2021

Cepu Block Oil Production Reaches 475 Million Barrels

    Cepu Block production managed by Exxon Mobil Cepu Limited (EMCL)  has reached 475 million barrels, exceeding the target in the plan of development/POD of 450 million barrels. The government encourages the development of oil and gas potential in this block so that production does not decrease significantly.

Exxon Mobil Cepu Limited (EMCL)

    The achievement of cumulative production of 475 million barrels is marked by the 700th shipment of oil lifting from the Cepu Block at the floating storage and offloading/FSO tanker ship Gagak Rimang. The volume of oil lifted is 1 million barrels, namely 850 thousand barrels belonging to the government and 150 thousand belonging to the Cepu Block Participating Interest Cooperation Agency (BKS PI). The shipment was led and witnessed directly by the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif.

Exxon Mobil Cepu Limited (EMCL)

    Arifin said that Exxon Mobil Cepu Limited (EMCL) had previously succeeded in increasing the Cepu Block reserves from the initial 450 million barrels to 940 thousand million barrels. Even from the production level, the oil and gas company originating from the United States was also able to reach more than 200 thousand barrels per day (BPD) from the initial around 160 thousand BPD in 2016. He hopes that Exxon Mobil Cepu Limited (EMCL) can maintain its performance.

"We hope that this capability can continue to be developed to optimize oil and gas production in Indonesia," said Arifin Tasrif. One of them, Exxon Mobil Cepu Limited (EMCL), and partners are expected to continue to develop the oil and gas potentials around the Cepu Block area.

"We hope that the existing potentials can be developed immediately so that they can be used as reserves so that the production process can then be carried out," he said.

Bloger Agus Purnomo in SKK Migas

    Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto added that the Cepu Block had reached a plateau production level with a volume of more than 220 thousand BPD for five years. This realization far exceeds POD with an estimated average production of 165 thousand BPD over two years. 

the Cepu Block by ExxonMobil

    However, as is normal for other oil and gas reservoirs, the Cepu Block production is now starting to decline. However, his party together with Exxon Mobil Cepu Limited (EMCL) continues to strive to maintain Cepu Block's oil production so that it does not drop drastically. 

"Currently SKK Migas continues to oversee Exxon Mobil Cepu Limited (EMCL) with Cepu Block partners to discuss various initiatives to manage the production decline that has begun to occur, including exploring new opportunities in the Cepu Block," said Dwi.

    According to him, there are additional reserves that are ready to be produced of up to 40 million barrels. "In the near term the potential that can be monetized is 40 million barrels, but infill drilling must first be carried out," he said.

    In addition, there is an opportunity to increase the production of the Kedung Keris Field from 10 thousand BPD to 11 thousand BPD. However, exploration drilling is needed to ensure the potential in Kedung Keris. Not only oil, but his party also encourages the monetization of gas potential in the Cepu Block area. 

    This is because the potential for gas reserves in the Cendana and Alas Tua fields is recorded to be very large, around 200 billion cubic feet/BCF with an estimated production of 83 million standard cubic feet per day/MMscfd. Then there is gas potential from several field structures in the Cepu Block, such as Giyanti and Pilang, the amount of which can reach 500 BCF. 

“Gas potential in the future. We hope that Mobil Cepu Limited (EMCL) and Pertamina can optimize this opportunity," he said.

Irtiza Sayyed

    ExxonMobil Indonesia President Irtiza Sayyed said that discussions on opportunities to monetize the potential that still existed in the Cepu block had been carried out intensively. One of the discussions is to ensure the potential reserves of 40 million barrels of oil that are ready to be produced.

"We will do whatever it takes to maximize production and curb production declines," he said.

Nicke Widyawati

    As a partner, President Director of PT Pertamina (Persero) Nicke Widyawati stated that she would fully support efforts to keep Cepu Block production stable.

PT Pertamina (Persero)

"We hope that in the future, the good and solid cooperation that has been carried out so far can be maintained and even increased, given the production level which is estimated to be stable at the level of 200 thousand BPD, so that it can support national energy security," She said.

    Referring to SKK Migas data, this year, the Cepu Block is targeted to produce 219 thousand BPD of oil. Meanwhile, the realization of production as of March 31, was still at 213,251 BPD or 97.4% of the target. 

    In 2020, the realization of Cepu Block production was recorded at 218,194 BPD. Oil production activities at the Banyu Urip Field, Cepu Block have been carried out since 2008 and the main production facilities began operating in the fourth quarter of 2015.

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