Ahok asks JTB to be on time

 

    The President Commissioner of PT Pertamina (Persero) Basuki Tjahaja Purnama paid a working visit to the Jambaran - Tiung Biru (JTB) gas unitization field development project operated by PT Pertamina EP Cepu (PEPC) in Bojonegoro.

PT Pertamina EP Cepu (PEPC)

    Arriving at the project location in Bandungrejo Village, Ngasem District, Bojonegoro, Ahok, as he is often called, he inspected several locations in the project. He hopes that the JTB Project activities can be on stream soon in November 2021.

"Overall the JTB Project is on the track. We hope to be on stream soon in November 2021. Especially for JTB Project workers, work safely and come home safely," said the man who is familiarly called Ahok.

Basuki Tjahaja Purnama AKA Ahok

    With the on stream target, it is hoped that the energy needs in the East Java region, especially from the gas sector, can be accommodated immediately. Pertamina is developing the JTB Project to meet national energy needs. The JTB project can support gas energy of 192 MMSCFD during the production period. 

The Jambaran Tiung Biru (JTB) project

    The JTB project will provide a multiplier effect in providing gas supplies to various industrial sectors in Central and East Java. In addition, in partnership with ExxonMobil Cepu Limited (EMCL), Pertamina is involved in a 45 percent share ownership in the Banyu Urip Oil Field.

ExxonMobil Cepu Limited (EMCL)

    Ahok went to JTB Field accompanied by CEO of Subholding Upstream Pertamina Budiman Parhusip, President Commissioner of PT Pertamina EP Cepu (PEPC) Gandhi Sriwidodo, as well as other Pertamina Management. The group arrived and was greeted by the President Director of PT Pertamina EP Cepu (PEPC), Awang Lazuardi, and his staff. 

the Banyu Urip Oil and Gas Field ExxonMobil

    In addition to the JTB Field, Ahok also visited the Banyu Urip Oil and Gas Field in the Cepu Block in Gayam District. Ahok appreciated the oil and gas operators who have helped the government in fulfilling oil and gas energy.

Republika, Page-9, Friday,  April 9, 2021

PGN Ready to Supply Gas for Kendal Industrial Estate

 

    PT Perusahaan Gas Negara Tbk (PGN) is ready to develop gas infrastructure and services to meet the needs of the Kendal Industrial Estate (KIK) in Central Java. This step is to foster economic activity through new industries in the region.

    PGN's Director of Infrastructure and Technology Redy Ferryanto explained, since 2016, he has been studying gas demand in the KIK area. Referring to the latest developments, it is known that the demand for gas in the region is quite large. PGN continues to coordinate intensively with KIK regarding the total potential gas demand to be used.

"KIK will send an official letter to PGN regarding the complete total demand," said Redy.

PT Pertamina EP Cepu (PEPC)

    The completion of the Gresik-Semarang transmission pipeline being worked on by PT Pertamina Gas (Pertagas) will provide certainty for gas supply in Central Java. This 267 kilometer (km) pipeline has a capacity of up to 400 million standard cubic feet per day / MMScfd. The gas supply will come from the Jambaran-Tiung Biru Project which is managed by PT Pertamina EP Cepu (PEPC). Later, his party will supply gas to KIK with the distribution network that is owned by the company.

the Jambaran-Tiung Biru Project

"As for the natural gas trade besides pipelines, such as CNG (compressed natural gas) and LNG (liquefied natural gas) will be managed by PGN's subsidiaries, namely PT Pertamina Gas Niaga (Pertagas Niaga) and PT Gagas Energi Indonesia (Gagas)," he said. Redy.

    He hopes that the optimization of gas distribution infrastructure to meet industrial energy needs can have a positive impact on the growth of KIK and the surrounding community for the progress of the economy of Central Java.

"The KIK that the government has built is one of the potential areas that can grow faster with the availability of natural gas energy to accelerate regional economic development," said Redy.

    KIK has been designated as a Special Economic Zone (KEK). This area is being worked on by a joint venture company between PT Jababeka Tbk and Sembawang Corporation. Until now, there have been 64 companies from 8 countries that have joined KIK, namely Taiwan, China, South Korea, Hong Kong, Singapore, Japan, Malaysia, and Indonesia. The growth of the industrial center in KIK is expected to be able to generate Micro, Small, and Medium Enterprises (MSMEs) and open new jobs for the surrounding community.

Investor Daily, Page-10, Friday, Feb 26, 2021

PGN Builds Gas Infrastructure in Kendal

 

    PT Perusahaan Gas Negara (Persero) Tbk is the sub-holding gas of PT Pertamina (Persero) supports the provision of infrastructure and natural gas distribution services in an effort to grow economic activity through new industries in the Central Java region. 

    One of the areas served by PGN is the Kendal Industrial Estate (KIK). KIK is a new industrial area that is the readiest in Indonesia with all the facilities. However, KIK is still having problems with certainty about the availability of natural gas which has made investors delay investing in this area.

    PGN's Director of Infrastructure and Technology, Redy Ferryanto, said that PGN has conducted a study on KIK, especially regarding gas demand since 2016. The latest developments show that gas demand in the region is very large. PGN continues to coordinate intensively with KIK regarding the potential total gas demand to be used.

"KIK will send an official letter to PGN regarding the complete total demand," said Redy.

    Redy said, PGN will strive to serve the natural gas trade through PGN's pipeline distribution network infrastructure in the Sales & Operation Region III (SOR III), which includes Central Java, East Java, and East Indonesia. Meanwhile, natural gas trading other than pipelines (CNG and LNG) will be managed by PGN's subsidiaries, namely PT Pertamina Gas Niaga (Pertagas Niaga) and PT Gagas Energi Indonesia (Gagas).

    In line with the completion of the construction of the Gresik-Semarang gas transmission pipeline by PT Pertamina Gas (Pertagas), Redy continued, PGN is targeting to be able to realize the certainty of distribution of natural gas supply in Central Java. 

    The 267 kilometers (km) long transmission pipeline network has a maximum gas flow capacity of around 400 million standard cubic feet per day (MMSCFD). The potential source of supply that will be supplied by the Gresik-Semarang Pipe comes from Jambaran Tiung Biru (JTB) owned by PT Pertamina EP Cepu (PEPC).

Jambaran Tiung Biru (JTB)

"Optimizing natural gas distribution infrastructure to meet energy needs for the industry is expected to have a positive impact on the growth of KIK and the surrounding community for the progress of the Central Java economy," said Redy.

    KIK has been designated as a special economic zone (KEK) as a result of a joint venture scheme collaboration between PT Jababeka Tbk and Sembawang Corporation. KIK was inaugurated by President Joko Widodo and Singaporean Prime Minister Lee Hsien Loong. To date, there are 64 companies from eight countries that have joined KIK, namely Taiwan, China, South Korea, Hong Kong, Singapore, Japan, Malaysia, and Indonesia in this ABTB product.

    The development of the industrial center in KIK is expected to be able to generate micro, small and medium enterprises (MSMEs) as well as open new jobs for the surrounding community. 

    According to Redy, the development of natural gas distribution infrastructure in Central Java is very challenging for PGN. Therefore, cooperation and support from the local government and various stakeholders are also very important for the development of natural gas infrastructure in Central Java.

Republika, Page-9, Thusday, Feb 25, 2021

The Jumbo Oil and Gas Project Is Still Ongoing

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) ensures that several upstream oil and gas projects are still continuing. This is to support the achievement of oil production targets of 1 million barrels per day and natural gas 12 billion standard cubic feet per day by 2030.

the Merakes project 

    Deputy for Operations of SKK Migas, Julius Wiratno, said that major projects in the upstream oil and gas sector are still in the construction stage, some of which are expected to be completed by the end of 2021. One of them is the Merakes project which is being worked on by Eni East Sepinggan.

Eni

"We hope this project can be on stream in April with gas production of 380-400 mmscfd," he said.

the Jambaran Tiung Biru (JTB)

    There is also the Jambaran Tiung Biru (JTB) project that is being supported by SKK Migas and the government so that it can be on stream in November this year. In the future, the project managed by PT Pertamina EP Cepu (PEPC) will produce 350 mmscfd of gas.

    SKK Migas is also working on the Tangguh Train-3 project that BP Berau Ltd is working on to be on stream immediately at the end of this year or early next year.

Blogger Agus Purnomo in SKK Migas

    The project is indeed constrained from an operational perspective due to restrictions on social activities in the context of tackling the Covid-19 pandemic.

the Masela Block

"Other major projects such as Indonesia Deepwater Development (IDD) and the Masela Block are in the process of business-to-business discussions between contractors and their partners," said Julius.

Indonesia Deepwater Development (IDD) Chevron

    The IDD project is facing obstacles because its main investor, Chevron Pacific Indonesia, is reportedly leaving, even though this project should be targeted to be on stream in 2025.

Kontan, Page-10, Saturday, Feb 20, 2021

WORKING TO MAINTAIN THE PRODUCTION OF THE CEPU BLOCK

    The cooperation contract contractor who holds the participation right in the Cepu Working Area is racking his brain to reduce the rate of natural production decline in the block which accounts for about 30% of the national oil.

PT Pertamina EP Cepu (PEPC)

    Meanwhile, the participating shareholders in the Cepu Block are divided into seven companies, namely PT Pertamina EP Cepu (PEPC) with a 45% share, ExxonMobil Cepu Ltd (EMCL) 20.5%, 

ExxonMobil Cepu Ltd (EMCL)

    Ampolex. (Cepu) Pte. Ltd. 24.5%, PT Sarana Patra Hulu Cepu 1.09%, PT Asri Dharma Sejahtera 4.48%, PT Blora Patragas Hulu 2.18%, and PT Petrogras Jatim Utama Cendana 2.24%.

    President Director of Pertamina EP Cepu Awang Lazuardi said that in connection with the potential decline in production after reaching the peak period this year, his party will coordinate intensively with a number of partners. According to him, Pertamina EP Cepu will actively communicate with ExxonMobil Cepu as the operator of the Banyu Urip and Kedung Keris fields, as well as other participating rights holders.

PT Pertamina Hulu Energi (PHE)

    In addition, together with PT Pertamina Hulu Energi (PHE) as the company's sub-holding and the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), his party will compile further strategic steps. Meanwhile, a number of work plans that are being and will continue to be carried out include maintaining reservoir pressure, well intervention/services, and preventive maintenance.

Blogger Agus Purnomo in SKK Migas

"Coordination with EMCL [Exxonmobil], our partners, and SKK Migas will continue to be carried out in compiling a work plan and execution," he said.

    Previously, Exxonmobil was exploring all options to optimize production in the Cepu Block, which has entered its peak period. Azi N. Alam, Vice President of Public and Government Affairs of ExxonMobil Indonesia, said that the company continues to explore various options to optimize the production of the Cepu Block safely and reliably.

"As the backbone of national oil production, we hope to produce more than double the initial expectations," he said.

    Based on the results of Exxonmobil's technical study, Azi explained that the recoverable reserve of the Banyu Urip Field has more than doubled from the initial plan of development (PoD) of 450 million barrels of oil to 940 million barrels of oil. According to Banyu Urip's PoD, the peak production period is estimated to be around 2 years with an average annual production of 165,000 barrels of oil per day. However, since the full facility start-up, ExxonMobil has been producing up to 225,000 barrels of oil per day for about 5 years.

    Production had increased by about 30% from the initial POD and peak production was 3 years longer than originally estimated. However, due to the natural characteristics of the reservoir, which is common throughout the world, ExxonMobil predicts Banyu Urip oil production will decline.

“Despite our continued efforts to optimize production, we have maintained outstanding safety and reliability performance as well cost-effective operation, "he explained.

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto said that the Cepu WK has a big role and contribution to the achievement of national oil and gas, including the production target of 1 million barrels of oil per day.

"The 2021 target for the Cepu Block working area will produce 219,860 barrels of oil per day and 55.16 MMscfd of gas," he said.

    Regarding the production target of 1 million barrels of oil per day, the government still needs to find an additional 350,000 barrels per day within 9 years. Member of Commission VII in the energy sector of the House of Representatives, Kardaya Warnika, said that the current condition in increasing domestic oil and gas production is the provision of incentives. The government is selling out incentives to contractors to spur exploration activities which he calls suspended animation.

"Given any incentives, but the legal certainty is not yet, investors are still in doubt," he said.

    Oil and gas practitioner Widyawan Prawira Atmaja said that the revision of the Oil and Gas Law, which has stopped for almost 9 years, is now crucial. He also urged Commission VII on the energy sector of the House of Representatives to immediately finalize the law to improve the domestic oil and gas investment climate. Energy Watch Executive Director Mamit Setiawan assessed that to achieve this vision one of the biggest obstacles is legal certainty.

    According to him, the certainty of new regulations is one of the key investments expected by oil and gas investors. In addition, the form of SKK Migas which is only issued through a Presidential Regulation is considered to provide uncertainty to investors.

SANGATTA OIL FIELD

    In another development, PT Pertamina EP Asset 5 Sangatta Field recorded oil production of 415 barrels per day from the ST-200 well. The record has tripled compared to production in December 2020.

    Hanif Setiawan, Sangatta Field Manager, said that the increase in production was an effort made between Pertamina EP Sangatta, Pertamina Drilling Service Indonesia, and the local government.

"The success of the ST-200 is proof that by synergizing between lines and running an unusual business operation by adapting to a pandemic situation, not only does it provide additional oil and gas production, but more than that, safety and health are maintained," he said.

    Drilling of the ST-200 well located in Sangatta Selatan Village, Sangatta Selatan District, East Kutai Regency, is carried out to a final depth of 2,203 meters measured depth (mMD) or 2,076 meters true vertical depth (mTVD). Pertamina EP, through the PEP Asset 5 operating unit, will drill 50 development wells and carry out the work of the Wells work plan for 2021.

    For Sangatta Block, 18 development wells will be drilled and five well work plans will be carried out. This activity is expected to contribute to efforts to produce 1 million barrels of oil per day and 12 billion standard cubic feet of gas per day by 2030. Based on the SKK Migas integrated operating system report on February 4, 2021, on a year-to-date basis, PEP Asset 5 is able to record Crude oil production from Kalimantan is 16,172 barrels per day.

    Meanwhile, for gas, production is around 15.44 MMscfd. This production is supported by five oil and gas fields, namely Sangatta and Sangasanga (East Kalimantan), Tarakan and Bunyu (North Kalimantan), and Tanjung (South Kalimantan and Central Kalimantan).

"For Sangatta Field, during 2020, oil lifting recorded as much as 696,065 barrels or 101% of the target. Production was recorded at 682,734 barrels or 110% of the target, "said Hanif.

Bisnis Indonesia, Page-19, Tuesday, Feb 9, 2021

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