Hard Work in the Upstream Oil and Gas Industry

 

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

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

Blogger Agus Purnomo in SKK Migas

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

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

PT Pertamina EP Cepu (PEPC)

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

The Jambaran Tiung Biru Oil Field

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

the Tiung Biru Jambaran Project

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

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

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

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

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

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

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

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

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

KEEP PRODUCTION

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

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

Merakes Field By ENI Italy

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

Agus Amperianto

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

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

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

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

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

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

Pertamina's Plan to Release Oil and Gas Block Shares is Hampered by Regulations

    PT Pertamina (Persero) 's plan to release a majority share ownership (participating interest / PI) in several oil and gas blocks that it manages has not been implemented due to regulatory constraints. Referring to the prevailing regulations, the company is not allowed to release more than 41% shares.

PT Pertamina Hulu Energi (PHE)

    Director of Strategic Planning and Development of PT Pertamina Hulu Energi (PHE) John H Simamora said that his party has categorized all oil and gas blocks that it manages into several clusters. One of these clusters consists of oil and gas blocks that have the potential to release the majority of their share ownership to another company.

"Some of this needs to be divested, but the current law does not regulate this. We are still in discussion with the government to divest this oil and gas block, so it is still a long way to go, ”he said.

    He explained that in the current regulations, Pertamina can only release PI ownership of a maximum of 41%. In fact, it does not always need to hold such large shares or the operatorship share in all the blocks it manages. Some of the oil and gas blocks to be divested are actually minus for the company. On the other hand, his party has other priorities in developing upstream assets.

"We want to focus on exploration and field optimization, including the EOR (enhanced oil recovery) study," said John.

    Currently, his party is still discussing the PI divestment regulation issue with the government. The number of oil and gas blocks whose shares are released also has the potential to change depending on the development of oil prices. If the price of oil improves in the future, the number of oil and gas blocks to be divested will be smaller.

"Regarding this regulation, we discussed with the Ministry of Energy and Mineral Resources and BUMN, and this can be resolved," he said.

    Previously, Pertamina had divided all of its oil and gas blocks into four clusters based on the number of reserves and the remaining oil and gas block production period. The first cluster includes oil and gas blocks that have a remaining oil and gas production period of more than 10 years. 

    The second cluster is the oil and gas block which can still be produced in the next 5-10 years. The third cluster is an oil and gas block that Pertamina can cooperate with for the medium scale.

    Meanwhile, the last cluster is an oil and gas block, which is actually more suitable to be managed by an oil and gas company smaller than Pertamina. This last cluster is planned to be released by the company. 

    Energy Saver from Trisakti University Pri Agung Rakhmanto assessed that the PI divestment by Pertamina was a normal corporate action for oil and gas companies. This step is usually taken to optimize the investment portfolio.

"In order to focus on perspective and provide a high economy," he said.

    For the national upstream oil and gas industry, Pertamina's strategy also opens up opportunities for other oil and gas companies with different standards to take over the management of these oil and gas blocks. Although, whether the divestment will be attractive or not still depends on the current market.

"It remains the market which will determine later, whether it is considered attractive by other actors or not," explained Pri Agung.

    Currently, Pertamina manages as many as 91 oil and gas assets at home and abroad through several of its subsidiaries. There are 56 oil and gas blocks in the country that are worked on by PT Pertamina Hulu Energi to manage 50 oil and gas blocks, PT Pertamina EP 1 oil and gas block, PT Pertamina EP Cepu (PEPC) 1 block, PT Pertamina EP Cepu (PEPC) ADK 1 oil and gas block, PT Pertamina Hulu Indonesia 3 oil and gas blocks.

    While abroad, as many as 35 assets are managed by and PT Pertamina Internasional EP. Referring to PHE data, this year, the company's oil production is targeted at 412 thousand barrels per day (BPD) and gas 2,710 million cubic feet per day (million standard cubic feet per day / MMscfd). As of August, the realization of oil production was recorded at 414 thousand barrels per day (BPD) or exceeded the target and gas was 2,670 MMscfd or 98.5% of the target.

Investor Daily, Page-10, Saturday, Nov 21, 2020

KPK Monitors Banyu Urip Oil

 

The process of resolving excess oil production from the Cepu Block Banyu Urip Field continues. The Corruption Eradication Commission (KPK), which was involved in the discussion, stated that there were three solutions to the problem of oil production in the Banyu Urip field that could not be bought. 

the Cepu Block Banyu Urip Field

    First, PT Pertamina can buy as much as possible the production of Banyu Urip Field. Second, if the production is to be sold, it is through an auction scheme. Third, if production is cut, there must be calculations on state revenue.

The Corruption Eradication Commission (KPK)

There are at least four institutions involved in discussing the excess production of the Banyu Urip Field. The four institutions are the Ministry of Energy and Mineral Resources (ESDM), SKK Migas, Ministry of Finance, and the KPK. This Anti-Corruption institution was asked to be involved so that there would be no problems and legal cases in the future. The KPK is still asking for additional data on the calculation of each option.

"The KPK asked for modeling for the three options presented," said KPK Prevention Deputy Pahala Nainggolan.

To Pahala Nainggolan's knowledge, the Banyu Urip oil that Pertamina did not buy because of its type, if processed, would produce diesel products whose demand was said to be decreasing, plus Pertamina's refinery capacity was almost full. When Pertamina did not buy, SKK Migas had also conducted the crude auction. 

Blogger Agus Purnomo in SKK Migas

    However, according to Pahala Nainggolan, the auction was not reached because the price was still below the Indonesian Crude Price (ICP). This is considered contrary to regulations, especially from the Directorate General of Budget, Ministry of Finance.

"So Banyu Urip's production is already full and faced with the burden of renting a container ship and the difficulty of getting the service of a vessel because of the competition," said Pahala Nainggolan.

Even the export option is also facing uneconomical price constraints. The last option, namely cutting production, is deemed inaccurate considering the possible impact on sub-contractors and oil and gas production targets as well as part of the government that will be cut. According to Pahala Nainggolan, the most likely option is that Pertamina is asked to buy Banyu Urip oil at the maximum possible volume, then the rest will be sold at a price below the ICP.

Export is not a problem

"The options taken are not the most profitable, but the ones that are the least detrimental to the state. Perhaps that is the best way, so that the options are taken, for example, sold under (ICP), have a basis," said Pahala Nainggolan.

Deputy Chairman of Commission VII of the Indonesian House of Representatives (DPR) Edy Soeparno hopes that there will be no production cuts.

"If there is excess crude, it can be exported. There are a market and a good price, then it is better to export it," explained Edy Soeparno.

Edy continued, the policy of exporting oil needs to be careful because it involves the government and the domestic market obligation (DMO). Upstream oil and gas practitioners, Tumbur Parlindungan assesses that exports are not a problem. With current conditions. Crude prices may be below the ICP. If it is sold, there is state revenue. Meanwhile, there is no state revenue for cutting production. " he said.

Kontan, Page-12, Tuesday, Nov 3, 2020

Secure Energy Supply, Pertamina Continues Strategic Projects

 

PT Pertamina (Persero) ensures that investment in strategic projects carried out in all business lines will continue even during the Covid-19 pandemic. This is to secure the resilience and independence of national energy in the future. 

Fajriyah Usman

    Pertamina Vice President for Corporate Communication, Fajriyah Usman, said that despite the pressure from low oil prices, exchange rates and a decline in energy demand, Pertamina remains committed to carrying out its strategic projects.

"Primarily, projects that will have an impact on national oil and gas production and energy in the next few years," said Fajriyah Usman.

the Jambaran-Tiung Biru Project

In Upstream, the company is working on the Jambaran-Tiung Biru Project through its affiliate, PT Pertamina EP Cepu (PEPC). In this project, Pertamina has completed drilling two wells at Wellpad Jambaran Central and perforating wells without using a rig using the Smart Coiled Tubing Unit in Jambaran East.

"This project will produce an average of 192 MMscfd (million standard cubic feet per day) gas with a target of gas on stream in 2021," said Fajriyah.

In addition, the company is also working on the KLD Project through PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ). After the KLD-1 well drilling has been completed, the project is currently entering the KLD-3 well drilling stage. This project is targeted to increase reserves and production by December 2020.

In other business sectors, Pertamina also continues with refinery development and construction projects through PT Kilang Pertamina Internasional (KPI). One of them is the Balikpapan upgrade and capacity building project and the Lawe-Lawe Terminal, which is one of the company's largest projects worth US $ 6.5 billion. This project will increase refinery capacity, improve product quality, and reduce the cost of production of fuel oil (BBM).

"The Balikpapan Refinery project has reached 22.26% as of October 22, 2020, running with strict health protocols, in addition to supporting the economic recovery program because it absorbs more than 5,000 workers," She explained.

In addition, the company continues to improve the reliability of its fuel storage and distribution facilities. Pertamina is running a number of storage tank infrastructure projects at the BBM Terminal, LPG Terminal, and the DPPU, as well as carrying out maintenance on 280 vessels. 

    This year, Pertamina has budgeted an investment fund of US $ 7.8 billion. Most of this investment fund was allocated for the upstream oil and gas sector amounting to the US $ 3.7 billion. In addition, the investment budget for refinery projects is the US $ 1.9 billion, downstream infrastructure is the US $ 1.2 billion, gas sub-holding investment is the US $ 800 million, and others US $ 300 million.

Fajriyah added, his party also ensures that the work of these projects is in accordance with the provisions for using the Domestic Component Level (TKDN). This is to strengthen the national industry, create jobs, and reduce dependence on imported products so that they can move the wheels of the national economy. Until the first semester of this year, Pertamina's TKDN average reached 54%.

"As a state-owned oil and gas company, Pertamina continues to carry out business and projects according to the direction of the Government, in this case, the Ministry of BUMN and the Ministry of Energy and Mineral Resources striving for the future of energy as well as driving the national economy by optimizing the use of domestic resources, "explained Fajriyah.

Investor Daily, Page-10, Monday, Nov 2, 2020

Strategic Project Investments are ongoing

 

PT Pertamina (Persero) ensures that strategic project investment in all of the company's business lines will continue during the pandemic. 

Fajriyah Usman

    VP of Corporate Communication of Pertamina, Fajriyah Usman, said that the company is committed to maintaining national energy production in the next few years.

"Even though we were hit by a triple shock during the pandemic and it caused obstacles in the field," said Fajriyah.

the Jambaran-Tiung Biru unitization field

She said several strategic projects in the upstream area, such as Jambaran-Tiung Biru managed by PT Pertamina EP Cepu (PEPC), are currently continuing and have successfully carried out rigless perforation with smart coiled tubing units.

This project will produce gas from the Jambaran-Tiung Biru unitization field with an average production of 192 MMscfd with a target gas on stream in 2021. In addition, activities off the north coast of West Java carried out by PHE ONWJ are continuing. After completing the KLD-1 well drilling, the KLD ONWJ development project is currently entering the KLD-3 well drilling stage.

This project is targeted to increase reserves and production by December 2020. In other business sectors, Pertamina continues the development of the PT Pertamina International Refinery. One of them is the Balikpapan and Lawe-lawe RDMP project, which is worth the US $ 6.5 billion. 

Nicke Widyawati

    Pertamina President Director Nicke Widyawati revealed the triple shock that Pertamina experienced during the pandemic.

First, a decrease in sales of 25% nationally. Second, the company's cash flow is affected by rupiah fluctuations. Nicke admitted that he had created a tough and very tough scenario to anticipate the effect of the exchange rate on the company's revenue. Third, the company's cash flow is affected by fluctuations in world oil prices. Currently, global crude oil prices are very volatile due to falling demand amid Covid-19.

Bisnis Indonesia, Page-5, Monday, Nov 2, 2020

Pertamina will Release PHE to the Stock Exchange

PT Pertamina (Persero) states that one of the sub holdings prepared to be offered to the public is upstream sub-holding which is operated by PT Pertamina Hulu Energi (PHE). This strategy is to increase the company's oil and gas production to be better.

PT Pertamina Hulu Energi (PHE)

Pertamina President Director Nicke Widyawati said, in managing oil and gas blocks, the company usually also partners with other companies. The reason is, by working with other companies, oil and gas production can be more optimal. 

Nicke Widyawati

   In fact, to work on the Rokan Block, the government requires Pertamina to partner with other companies. This is also the basis for the company to prepare upstream sub-holding for the IPO.

"The first thing we will see [for IPO] is upstream sub-holding," said Nicke Widyawati.

Nicke Widyawati explained, many of the company's upstream assets still have the potential to be developed. However, the development of oil and gas blocks requires huge funding. In the future, around 60% of the company's total budget will be used to fund the upstream oil and gas project.

"So, later the funds obtained from the IPO will be used for upstream investment," Nicke said.

Upstream oil and gas investment, called Nicke Widyawati, is not limited to the upstream oil and gas assets owned by the company. Funds from the IPO will also be used to add new upstream oil and gas assets.

"Our IPO will use the funds for the upstream acquisition," said Nicke Widyawati.

At the end of last year, the company had budgeted funds for the acquisition of oil and gas blocks of US $ 150 million this year. Although it is not yet certain which block is targeted, the company is eyeing assets in Africa and the Middle East.

Energy observers from Trisakti University Pri Agung Rakhmanto rate, the IPO step is very good to improve corporate governance, because it must be more open. IPO is also good to be able to raise funds from third parties (public).

"For Pertamina's upstream, which does require strengthening funds for investment, this is positive. When it comes to performance, that's another thing, it also depends on how to run the company, "he said.

Regarding Article 33 of the 1945 Constitution which states that production branches which are important for the State and which control the lives of many people are controlled by the State, according to him, it does not become an issue if the IPO does not relinquish the majority of share ownership.

"As long as the majority shares are still in the country, in my opinion, more positive," said Pri Agung.

He added Pertamina was not the first oil and gas BUMN to be listed on the exchange. At present, there are already many other state-owned oil and gas companies listed on the stock exchange, such as Petrobras which is a Brazilian oil and gas BUMN, Petronas Malaysia, YPF Argentina, Statoil Norway, and Saudi Aramco Saudi Arabia.

Management of Oil and Gas Blocks

In addition to the IPO plan, Pertamina is also restructuring its oil and gas block management. Nicke explained, after the sub-holding was formed, the management of the oil and gas block would be done by region. Previously, despite being in one area, the management of the oil and gas block was carried out by a different subsidiary. For example in Sumatra, there are oil and gas blocks managed by PHE and PT Pertamina EP.

"We think this should be managed in synergy and coordination, so there can be efficiency. For this reason, under the sub-holding [oil and gas block] is managed in a way regionalization, "explained Nicke Widyawati.

In this way, all resources and equipment procurement can be synergized. All this time due to being separate, procurement of tools such as rigs has become difficult and long. This is because among subsidiaries scrambling to find rigs, while the number of rigs in the market is limited. 

    Other parties are also reluctant to increase the number of rigs because the company's procurement contracts tend to be short-term. These problems have become one of the causes of exploration and achievement of upstream oil and gas production below the target.

"This is how we manage all assets more efficiently and at the same time, improve our products and services," said Nicke.

It also wants to encourage investment in rig procurement in the country. Under the upstream sub-holding, there are several subsidiaries that will work on Pertamina's oil and gas blocks in certain areas. 

    Precisely, Pertamina EP will manage the company's oil and gas block in Java, PT Pertamina Hulu Indonesia will work on upstream oil and gas assets in Kalimantan, Pertamina EP Cepu (PEPC) will handle oil and gas working areas in Eastern Indonesia, and PT Pertamina International EP continues to manage oil and gas blocks outside the country.

Dwi Seotjipto

Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Seotjipto said, his party would see Pertamina's explanation of organizational changes in upstream sub-holding, mainly related to the authority of each operator in Pertamina's oil and gas block. The reason is that the Production Sharing Contract / PSC signed by the government is the company that is the operator.

Blogger Agus Purnomo in SKK Migas

"With the sub-holding, we will later see its authority in investment as well as the implementation and operation of the oil and gas block concerned," Dwi Seotjipto said.

Regarding the implementation of the contract, this depends on the bureaucracy established by Pertamina in the presence of this sub-holding. If the bureaucracy and decision-making are simpler, and the authority of the oil and gas block operator can be supported, there will be no problems.

"Hopefully it is better, the important thing is that the bureaucracy is not long, so the investment step is faster," Dwi said.

Investor Daily,  Page-10, Tuesday, June 16, 2020

Pertamina EP Cepu Optimistic that JTB Project Operates on Time

PT Pertamina EP Cepu (PEPC) is optimistic that the Jambaran-Tiung Biru unitization project can be completed on time and operational in mid-2021. Although the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) sees no indication of delays in the execution of this project.

Jamsaton Nababan

PEPC Managing Director Jamsaton said, his party understood SKK Migas' concerns regarding the potential pullback of the JTB Project. The reason is SKK Migas could have estimated the assumption of the worst scenario considering the impact of the Covid-19 pandemic on the work of national oil and gas projects.

PT Pertamina EP Cepu (PEPC)

He admitted, there were several obstacles in the work of the JTB Project which indeed had the potential to cause delays. But it is trying to innovate to minimize the potential for these delays.

the Jambaran-Tiung Biru unitization project

"Namely by adjusting construction schedules and materials on site but by maintaining the onstream target in July 2021," Jamsaton said.

Jamsaton explained the obstacle faced was the limited workforce of experts who were willing to work in the field due to fears of contracting the Covid-19 Virus. Then, there are limitations to the mobilization of workers due to the enactment of Large-Scale Social Restrictions (PSBB) as prevention of the spread of the virus. The quarantine period imposed by the Bojonegoro Regency Government also reduced the effective working days.

"These three things cause the workforce needs in the field are not optimal so they cannot do construction speed-ups," he said.

Not only that, the process of manufacturing goods in several countries stalled due to lockdowns imposed in those countries. In a country that does not run a lockdown, the manufacturing process is slow due to restrictions on working hours and transportation of materials including manufacturing in Indonesia.

Investor Daily, Page-9, Wednesday, June 10, 2020.

National Strategic Projects Account Accord Targeting

At the time of the outbreak of the Covid-19 pandemic in Indonesia, PT Rekayasa Industri (Rekind) successfully completed a number of national strategic projects in accordance with the specified work targets. 

PT Pertamina EP Cepu (PEPC)

    One of the national strategic projects currently able to achieve the specified target is the Gas Processing Facility (GPF) Project for the Gas Unitization Field - Jambaran Tiung Biru (JTB), Bojonegoro, East Java, owned by PT Pertamina EP Cepu (PEPC) - a subsidiary PT Pertamina (Persero).

PT Rekayasa Industri (Rekind)

Rekind who joined the JGC-IND consortium recently succeeded in achieving an important milestone in the project, namely the appointment of Selexol Heavy Equipment and Regenerator for the Gas Processing Facility (GPF) Gas Unitization Unit - Jambung Tiung Biru (JTB) with a total weight of 760 tons.

 Jambung Tiung Biru (JTB)

    The implementation of the GPF EPC project work continues even in the face of the Covid-19 pandemic situation so that the progress of the JTB project work in May 2020 has reached 64.20% with a completion target of July 2021.

"It is an honor for Rekind to play a big role in delivering the country's national strategic projects to achieve the specified targets. I am very grateful for this achievement, even though the project team had to struggle during the challenges of the Covid-19 outbreak, "said Rekind President Director Yanuar Budinorman.

Rekind's high commitment to implementing a number of projects mandated by the state was also reflected in the implementation of the Lombok CFSPP FTP-2 PLTU project (2x50MW) in Sambelia, East Lombok, West Nusa Tenggara Province.

Rafako S.A - Poland

The involvement of Rekind with Rafako S.A (a Boiler manufacturer from Poland) is believed to support the national electricity program of 35,000 MW and specifically to accelerate the increase in electrification ratios on the island of Lombok, West Nusa Tenggara (NTB).

At the end of 2019 Rekind also completed the Muara Laboh Geothermal Power Plant (PLTP) located in Solok Selatan Regency, West Sumatra, with 85 MW capacity owned by PT Supreme Energy Muara Laboh (SEML).

At present Rekind is also implementing the Rantau Dedap PLTP Project with a capacity of 98.4 MW (2 units), which until April 2020 the project progress has reached 81.6%. The project, owned by PT Supreme Energy Rantau Dedap (SERD), will later supply electricity to the electricity system in the South Sumatra region. 

    The achievements made by Rekind did not stop there. The subsidiary of PT Pupuk Indonesia (Persero) also has an achievement in the construction of other national strategic projects, such as the Balikpapan Refinery Development Master Plan (RDMP) project.

Hyundai Engineering Co., Ltd.

In carrying out the project owned by PT Pertamina (Persero), Rekind was incorporated through Joint Operation (JO) together with three EPC companies from home and abroad, namely PT Pembangunan Perumahan (PP), Hyundai Engineering Co., Ltd. (HEC) and SK Engineering & Construction Co., Ltd. (SKEC).

SK Engineering & Construction Co., Ltd. (SKEC)

 Investor Daily, Page-9, Saturday, June 6, 2020

Drilling according to Plan, JTB Project Starts Operating Next Year

PT Pertamina EP Cepu (PEPC) has completed the completion of four oil and gas wells in the Jambaran-Tiung Biru Field (JTB). This subsidiary of PT Pertamina (Persero) will complete drilling of two more wells so that the JTB Project can start operating in 2021.

the Jambaran-Tiung Biru Field (JTB)

Director of PT Pertamina EP Cepu (PEPC) Jamsaton Nababan said the completion phase was an important step in the development of the Jambaran-Tiung Biru Gas Field well. Because the well has entered the final phase before then producing gas.

"We hope that this continued operation can take place safely and smoothly, in accordance with our commitment to safety standards. We hope that the JTB project will run safely, safely and smoothly until the target on stream is achieved by 2021, "he said.

RIG PDSI

The completion of the four wells at Wellpad Jambaran East runs from 6 April to 25 May. At this stage, the production pipeline is installed and all its accessories, including the X-Mass Tree, are used to regulate the gas production flow.

RIG PDSI # 40

The four wells are JAM-3, JAM-4ST, JAM-5ST, and JAM-8. The perforation work will later be done without using a rig. Drilling Operations Manager Dhanar Eko Prasetyo added, his party then moved the rig to Jambaran Central Wellpad once the completion of four wells in Jambaran East was completed on May 25. Subsequently, drilling of two wells in Jambaran Central, namely JAM-6 and JAM-7, began this June.

"In carrying out the work, we ensure the safety of every worker involved. Safe working hours at the Drill Site have reached 934,830 as of May 8, 2020, "he said.

Safe working hours are an important part of the JTB Project operated by PEPC. In total, PEPC has reached 17,391,921 Safe Working Hours. Previously, Pertamina EP Cepu had successfully completed the installation of the Selexol Regenerator and Absorber. 

    In addition, the company has also completed detailed design work (front end engineering design / FEED), land acquisition, and early civil work. In addition to Well drilling, Pertamina EP Cepu is also still working on gas / GPF processing facilities construction and well drilling.

Investor Daily, Page-10, Tuesday, June 2, 2020

After Completion, PEPC Prepares to Move the Rig

Another achievement step was achieved by PT Pertamina EP Cepu (PEPC) in the Jambaran-Tiung Biru (JTB) Gas Project, successfully completing the completion stage in the Wellpad Jambaran East drilling activity, which was carried out from April 6 to May 25, 2020.

the Jambaran-Tiung Biru (JTB) Gas Project

This completion stage is the process of installing tubing and all its accessories, including the X-Mass Tree to regulate the flow or flow of gas production later.

RIG PDSI

The wells that have been completed and are ready for perforation of the production zone include 4 wells in Wellpad Jambaran East, namely JAM-3, JAM-4ST, JAM-5ST, and JAM-8. The perforation work will later be carried out by Rigless Operation (not using a rig).

"This completion is an important stage in developing the Jambaran-Tiung Biru Gas Field well because the well has entered its final phase before producing gas. We hope that this continued operation can take place safely and smoothly in accordance with our commitment to safety standards. For this reason, we pray for the JTB Project to proceed safely, safely and smoothly until the on-stream target is reached by 2021, "said Jamsaton, President Director of PT Pertamina EP Cepu.

This was confirmed by Drilling Operations Manager Dhanar Eko Prasetyo, who explained that in carrying out this activity, PEPC remained Compliant and Concerned with applicable safety standards.

RIG PDSI # 40

"After this completion, we will carry out the Rig Move activities or move the rig from Jambaran East to Jambaran Central, starting on May 25, 2020, with the target to be able to start drilling operations at the JAM-6 and JAM-7 wells in June 2020. In the implementation of work, we chose to work safely, by ensuring the safety of every worker involved. Alhamdulillah, safe working hours at the Drill Site have reached 934,830 as of May 28, 2020. " he said.

Bhirawa, Page-5, Tuesday, June 2, 2020

Upstream Oil and Gas Industry Asked to Maintain Activities and Avoid Layoffs

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) requests that the upstream oil and gas industry continue to maintain operations and avoid termination of employment (PHK), in order to maintain the continuity of the industry in the following years, despite being affected by the Covid pandemic. 19 and low world oil prices.

The Head of SKK Migas Dwi Soetjipto said that the achievement of the APBN target in the first quarter was very good, but in the future what was prioritized was how to prevent activities being stopped and no layoffs.

He added, by maintaining upstream oil and gas operations, including in various drilling, maintenance, and other operational programs, the sector was expected to continue to drive the national economy, create a multiplier effect for the regional economy and supporting industries, and maintain the availability of employment.

"Like the blood that continues to flow, the upstream oil and gas industry is expected to continue to drive the pulse of the Indonesian economy," Dwi said.

Meanwhile, SKK Migas Deputy for Operations Julius Wiratno said that until now the commitment of the Cooperation Contract Contractors (KKKS) to achieve the production target is still maintained. From the 1st quarter of 2020 data shows that, for oil production, 7 KKS Contractors exceeded the National Budget target and 8 KKKS exceeded the technical targets in the 2020 Work Plan and Budget. Whereas for gas distribution 5 KKS Contractors were able to exceed the National Budget target and 12 KKS Contractors exceeded the technical target Work Plan and Budget 2020.

SKK Migas has sent a letter of appreciation for KKKS who achieved the target in 2019 and the first quarter of 2020, as well as a warning letter for KKKS that did not reach the target in the first quarter of 2020. In that letter, SKK Migas also submitted input and recommendations for each KKS Contractor based on monitoring the implementation of the Work Plan and Budget and other monitoring so that in the second quarter of 2020 until the end of the year, KKKS who have not yet reached the target can implement the SKK Migas recommendations and those who achieve the target can look for operational ways and innovations so that the achievements obtained can be further improved.

In addition to the operational aspects, SKK Migas through the letter reminded the PSC Contractors to implement the principles of work safety and environmental protection so that the incident rate in the second quarter and until the end of 2020 can be maintained at the specified level.

On Target

Meanwhile, SKK Migas also seeks to prevent the four strategic upstream oil and gas projects from being late in operation despite the Covid-19 pandemic. All projects are targeted to be completed in stages until 2027. SKK Migas Head Dwi Soetjipto said, although the Covid-19 pandemic affected the progress of upstream oil and gas work, the oil and gas contractor working on the four national strategic projects was still committed to completing the project on time.

Jambaran-Tiung Biru Field (JTB)

These four projects are the development of the Train-3 Tangguh Refinery, Jambaran-Tiung Biru Field (JTB), the Masela Block, and the Indonesia Deepwater Development (IDD) Project. One project that is quite constrained by Covid-19 is the development of the Abadi Field, the Masela Block.

Inpex Corporation

"But we are still discussing with Inpex so that onstream (operations) will not retreat from 2027," Dwi Soetjipto said.

Dwi Soetjipto explained the existence of a pandemic hampered the work on the gas project field survey. In order to prevent the spread of Covid-19 from mobility restrictions, a field survey for the Abadi project could not be carried out.

"Maybe there will be a speedup in the coming year," he said.

In addition, a pandemic that suppressed energy demand and global oil prices, Dwi said also made marketing gas that would later be produced from the Abadi Project difficult.

"First of all, what is still constrained is that prospective buyers are still waiting and seeing," he said.

In fact, a commitment to purchase gas is needed so that the Abadi Project can reach the final investment decision / FID stage which is targeted by the end of 2021. So far, Inpex has just obtained a commitment to purchase gas by PT PLN (Persero) 2-3 million tons per year and PT Pupuk Indonesia (Persero) 150 million standard cubic feet per day / mmscfd. At least, around 80% of the 9.5 million tons per year gas production must have a purchase commitment so that FID can be achieved. Constraints due to the Covid-19 pandemic, also experienced by the Train-3 and Jambaran-Tiung Biru Refinery Project.

"But the Train-3 Tangguh Refinery Project will still be on stream (operation) in 2021. Then, JTB is still committed to onstream in 2021," he said.

While the Jambaran-Tiung Biru Project works until the end of March, still referring to SKK Migas data, it still reached 57.91% of the target of 58.17%. So that the project's operating schedule is expected to be slightly delayed from initially the third quarter of 2021 to the fourth quarter of the same year.

The US $ 1.53 billion projects will produce 190 million cubic feet of gas per day / mmscfd. Pertamina EP Cepu President Director Jamsaton Nababan once revealed that the JTB Project was a little late compared to the schedule. However, this delay range is still fairly reasonable and can still be pursued.

It has prepared a number of strategies to pursue this delay. In April-May, he was optimistic that he could return the JTB Project's progress according to plan. The investment value of these four national strategic projects reaches the US $ 37.21 billion. While the additional oil production is 65 thousand BPD and 3,484 mmscfd of gas.

Investor Daily, Page-9, Monday, May 4, 2020