Three Upstream Oil and Gas Projects Ready to Onstream

    The Special Task Force for Upstream Oil and Gas Business Activities or SKK Migas stated that as many as three upstream oil and gas projects are projected to start operating or onstream in the remaining time of this year.

Blogger Agus Purnomo in SKK Migas

    SKK Migas Deputy Operations Julius Wiratno said that of the 12 projects that have been onstream until the third quarter of 2021, there are still 3 more projects that are being prepared to increase production by around 3,000 barrels of oil per day/BOPD.

    Julius said Pertamina EP's SP Bambu Besar (Asso) project is estimated to provide additional gas production of 7 MMscfd, the Bukit Tua Project Phase 3 Petronas Carigali Ketapang II Ltd. with the potential for additional production of 14,000 BOPD and 30 MMscfd of gas. Then, one of the National Strategic Projects (PSN) for upstream oil and gas, namely Jambaran Tiung Biru Pertamina EP Cepu with a gas production potential of 330 MMscfd.

Blogger Agus Purnomo in Petronas Carigali Ketapang

"SP Bambu Besar Pertamina EP is about to be completed, the plan is to onstream this November. Bukit Tua Phase 2B will stream in December," he said.

    Meanwhile, as many as 12 oil and gas projects have successfully streamed, making the 2021 target 100% realized. The project provides additional national oil and gas production of 14,486 BOPD and 489 MMscfd of gas, with a total investment of US$1.5 billion, or equivalent to Rp21.75 trillion.

    Julius said, if all these projects can be realized, the investment figure will increase to US$ 2.92 billion or equivalent to Rp. 42.34 trillion. According to him, the acceleration of completion of upstream oil and gas projects cannot be separated from the impact of the high increase in world oil prices, above US$80 per barrel.

"World oil prices that continue to increase throughout 2021 encourage KKKS to accelerate the completion of upstream oil and gas projects so that in the third quarter of 2021 the target has been achieved 100 percent. The performance of the completion of upstream oil and gas projects will have a positive impact on accelerating the realization of upstream oil and gas investment until the end of 2023," he said.

    Referring to the results, said Julius, SKK Migas is optimistic that the entry rate at the beginning of next year will be at an optimal level.

    Regarding the JTB project, Julius said there is still a construction stage, pre-commissioning. According to him, the Covid-19 pandemic has had an impact on the progress of the project.

    Julius said the Covid-19 pandemic also had an impact on the limited workforce that could be deployed to the field. Weather constraints are one of the inhibiting factors for the current construction completion.

    Progress is about 94% more. We are still trying to get gas in at the end of 2021," he said.

PEPC

    Previously, PEPC President Director Awang Blueuardi said that the synergy between SOEs in the construction of the JTB gas unitization field development project belonging to Pertamina EP Cepu (PEPC) Zone 12 Eastern Indonesia Subholding Upstream Pertamina was expected to remain solid even though it was carried out in the midst of the Covid-19 pandemic.

    He said there were many challenges faced by this project during the pandemic, but his party continued to strive to develop innovations and coordinate so that they could continue to solve them.

Bisnis Indonesia, Page-4, Thursday, Nov 4, 2021

As of June, Pertamina's Oil and Gas Production Reaches 850 Thousand BOEPD

    PT Pertamina Hulu Energi, the Upstream Subholding of PT Pertamina (Persero), recorded the realization of oil and gas production in the first half of this year at 850 thousand barrels of oil equivalent per day/BOEPD, below the target of 974 thousand BOEPD. 

    However, the company is optimistic that it can achieve the oil and gas production target that has been set this year. PHE Development and Production Director Taufik Adityawarman said the company's contribution to oil and gas production came from domestic and foreign oil and gas blocks.

"In total, oil production is 390 thousand barrels per day (BPD) and gas is 2.665 million standard cubic feet per day / MMscfd, so that when totaled it becomes 850 thousand BOEPD," he said at the Upstream Subholding Media Gathering.

    The realization of 850 thousand BOEPD is still 87.27% of the Company's Work Plan and Budget (RKAP) target of 974 thousand BOEPD. In detail, the realization of oil production of 390 thousand BPD is only 75.44% of the target of 517 thousand BPD, while gas of 2,665 MMscfd actually exceeds the target of 2,648 MMscfd. 

PT Pertamina Hulu Rokan (PHR)

    He detailed that Regional I Sumatra under the management of PT Pertamina Hulu Rokan (PHR) recorded oil production of 49 thousand BPD and 568 MMscfd of gas. Regional II Java by PT Pertamina EP produces 66 thousand BPD oil and 445 MMscfd gas.

PT Pertamina EP

    Regional III-Kalimantan under PT Pertamina Hulu Indonesia contributed 64 thousand BPD oil and 691 MMScfd gas. Regional IV-Eastern Indonesia under PT Pertamina EP Cepu (PEPC) produces 114,000 BPD of oil and 490 MMscfd of gas. Thus, the company's four domestic regions recorded oil production of 293,000 BPD and 2,194 MMscfd of gas. Furthermore, the contribution from foreign assets or Regional V under PT Pertamina Internasional EP is 97 thousand BPD for oil and 311 MMscfd for gas.

    From the operational performance, it has realized 6 exploration wells and is working on 3 other wells. Then, the realization of 2D seismic along 1,186 kilometers (km) and 3D seismic covering an area of ​​201 square kilometers (km2).

"Then the realization of exploitation wells has 101 wells and 20 ongoing wells, 241 workover wells, and 5,085 well intervention wells have been carried out," he said.

    For additional reserves, as of June, PHE has recorded additional 1P reserves of 36.3 million barrel oil equivalent/MMBOE, and Contingency Resources 2C reserves of 37.8 MMBOE. The implementation of Community Activity Restrictions (PPKM), Taufik admits, has caused some problems in its operations. 

    Domestically, some assets must be stopped operating within a certain period of time because more than 50% of workers have been exposed to Covid-19. Abroad, where activity restrictions are also being carried out, his party must stop operations at floating storage and loading and unloading facilities / FSOs in Malaysia because of the ongoing exposure to Covid-19.

    However, he stressed that his party has prepared several mitigation measures to restore the lost oil and gas production recovery plan. This recovery plan is applied to assets that still have very high production levels. As another strategy, his party will optimize additional production from the Rokan Block managed by PHR as of August 9, 2021.

"Hopefully oil and gas production by the end of the year can be recovered," said Taufik.

Asset Acquisition

    Taufik added that the company's oil and gas production is targeted to be boosted to 1 million bpd for oil and 4,000 MMScfd for gas by 2024. One of the strategies undertaken to achieve this target is by acquiring assets from overseas oil and gas blocks. The reason is, with the realization as of last June, there is still a difference in oil production of 600 thousand bpd and 1,400 MMscfd of gas that must be pursued.

“Departing from that, the hope for the future is acquisitions. The current acquisition, we have participated in the bidding,” he said.

    Unfortunately, he did not mention which block bidding auction the company was participating in. He explained that the acquisition of assets abroad needed to be done because there were no giant discoveries in Indonesia. 

the Cepu Block

    The last giant discovery found in the country was the Cepu Block in 2001, while the gas discovery was the block that supplied the Tangguh LNG Plant in the 1990s. In selecting the assets to be acquired, continued Taufik, his party will consider the level of the reserve to production (R to P) of the oil and gas block. It targets to increase the company's R to P from the current level of 7 to 10.

"What are the criteria [of the targeted oil and gas block], which still have large reserves, large R to P, and large production volumes," he added.

    Previously, Director of Oil and Gas Program Development at the Ministry of Energy and Mineral Resources (ESDM) Dwi Anggoro Ismukurnianto said that in order to achieve the national oil production target of 1 million bpd by 2030, the acquisition of oil and gas fields abroad must be carried out by national oil and gas companies, both state-owned and private. 

    To that end, the government will facilitate acquisitions through bilateral cooperation, starting with G to G (government to government). Currently, Pertamina has a number of oil and gas blocks in 12 countries. In Algeria, the company owns shares in the Menzel Lejmet North (MLN), El Merk (EMK), and Ourhoud (OHD) blocks.

    In Iraq, the company holds shares in West Qurna 1 Field. While in Malaysia, the company holds shares in Block K, Block Kikeh, Block SNP, Block SK309, and Block SK311. Furthermore, after the acquisition of the French oil and gas company, Maurel&Prom, the company has oil and gas assets spread across Gabon, Nigeria, Tanzania, Namibia, Colombia, Canada, Myanmar, Italy, and other countries. However, its main assets that are already producing are in Gabon, Nigeria, and Tanzania.

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

Upstream Oil and Gas Getting More Difficult

    The upstream oil and gas industry needs time to recover because contractors are still looking at the extent of the impact of the pandemic, which is currently booming.

    The Covid-19 pandemic, which was accompanied by a surge in new cases, forced the government to tighten people's mobility, making it more difficult for the upstream oil and gas industry to revive this year.

    This was acknowledged by the Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto who stated that the Covid-19 pandemic had put pressure on the upstream oil and gas industry. The implementation of a number of upstream oil and gas activities was finally hampered.

"Some upstream oil and gas activities have been delayed for 1 to 5 weeks," said Dwi.

    A number of disrupted activities include 234 kilometers (km) of 2D seismic surveys, 165 km² of 3D seismic, six exploration wells, 12 development wells, and three development projects.

    In an effort to support the increase in oil and gas production, until June 2021, 186 development wells have been drilled, 309 workover activities, and 11,307 well service activities have been carried out. The realization is still far below the target set.

Blogger Agus Purnomo in SKK Migas

    In 2021, SKK Migas targets drilling 616 development wells. This number increased from the realization in 2020 which was only 240 wells.

    For workover activities, SKK Migas targets 615 wells, while well service activities are targeted at 26,431 activities.

    Meanwhile, during the first semester of 2021, SKK Migas recorded that the realization of ready-to-sale production or oil and gas lifting reached an average of 1.63 million barrels of oil equivalent per day (boepd) or only reached 95.6% of the 2021 APBN target of 1. 71 boepd.

    Dwi explained that entering the beginning of the year, the upstream oil and gas industry had started with low achievements with a production reduction of 19,500 bopd.

    He said there were unplanned shutdowns in a number of work areas which resulted in a production reduction of 4,000 bopd and a delay in drilling and drilling results which reduced production by 5,000 bopd.

"The outlook can be 680,000 barrels of oil per day, gas from the targeted 5,600 MMscfd, the proposed KKKS 5,100 MMscfd, and the proposal can be 5,108 WP&B and because there is a low entry point, it is projected to reach 5,529 MMscfd," he explained.

    According to him, the Covid-19 pandemic has made operational activities inefficient due to a reduction in manpower in the field.

    From a financial point of view, the price of oil that had fallen last year has disrupted the cash flow of cooperation contract contractors (KKKS) so that investment activities have stalled.

"We need time because contractors are also looking at the extent of the impact of the pandemic, which is currently booming," he said.

    SKK Migas Deputy Operations Julius Wiratno added that the reduced mobility of people and equipment during the Covid-19 pandemic was indeed felt by the upstream oil and gas sector, which in turn had an impact on operational activities.

    According to him, throughout the year operational activities are still quite challenging. This will certainly affect the long-term program (LTP) that has been set by SKK Migas.

"The correlation with LTP will be corrected, we are setting terms and conditions from this year to increase next year, but in fact, we will decrease by 3% -4% from the estimate," he explained.

    Meanwhile, during the first 6 months of this year, there were 10 out of 15 KKKS that recorded lifting realizations below the target of this year's APBN.

EMCL

    ExxonMobil Cepu Limited (EMCL) recorded a red report card with the realization of oil lifting of 208,936 bopd. This record is still lower than the 2021 State Budget target set at 219,000 bopd.

Chevron Pacific Indonesia (CPI)

    Apart from ExxonMobil Cepu Limited (EMCL), another KKKS that are below the target is Chevron Pacific Indonesia (CPI) with a lifting realization of 160,646 bopd or only 97.4% of the 2021 APBN target, which is 165,000 bopd.

PT Pertamina EP

    PT Pertamina EP is also a KKKS that recorded a red performance with the realization of oil lifting only 71,420 bopd or 84% of the APBN target of 85,000 bopd.

Pertamina Hulu Energi ONWJ

    Pertamina Hulu Energi ONWJ Ltd recorded the realization of 27,615 bopd or 98.6% of the 2021 APBN target of 28,000 bopd.

    Another Pertamina group that recorded below-target performance was Pertamina Hulu Energi OSES with the realization of 24,594 bopd or 91.1% of the 2021 APBN target of 27,000 bopd.

    Pertamina Hulu East Kalimantan reported the realization of 9,174 bopd or 87.4% of the 2021 APBN target of 10,500 bopd.

    Minor results were also recorded by Pertamina Hulu Sanga-Sanga with a lifting of 11,807 bopd or 99.2% of the APBN target of 11,900%. BOB Bumi Siak Pusako-Pertamina Hulu only reached 95.9% of the APBN target of 9,000 bopd with a realization of 8,913 bopd.

Petrochina International Jabung Ltd

    Next is Petrochina International Jabung Ltd which recorded a Red report card with the realization of 14,823 bopd or 92.6% of this year's APBN target of 16,000 bopd.

    On the other hand, for the realization of natural gas lifting, almost all KKKS have succeeded in exceeding the target set in the 2021 State Budget. However, there are several KKKS experiencing gas absorption problems.

STILL DEPRESSED

    Executive Director of the National Oil and Gas Company Association (Aspermigas) Moshe Rizal believes that the Covid-19 pandemic has made operations in the field quite challenging.

    In addition, KKKS still do not dare to increase their investment during the Covid-19 pandemic. The problem is, even though production is already running, increasing production cannot be separated from the need for investment.

"The government must immediately overcome this pandemic so that operations can run normally again. At the very least, to restore investor interest, incentives must be provided,” he said.

    Meanwhile, ReforMiner Executive Director Komaidi Notonegoro said referring to the realization of Indonesia's lifting since 2000, the results obtained usually do not reach the target and lead to a downward trend.

    In addition, the Covid-19 pandemic that has occurred since last year has again made the lifting target set by the government difficult to achieve due to the disruption of operational activities.

"However, conditions before the pandemic had shown a downward trend," he explained.

Bisnis Indonesia, Page-4, Monday, July 19, 2021

First Quarter of 2021, Pertamina's Oil and Gas Production Exceeds the Target

 

    PT Pertamina Hulu Energi, the Sub holding Upstream of PT Pertamina (Persero), managed to record oil and gas production of up to 861 thousand barrels of oil equivalent per day / BOEPD in the first quarter of 2021. This realization is 2% higher than the company's target this year of 848 thousand BOEPD.

PT Pertamina EP

    Pertamina Hulu Energi President Director Budiman Parhusip said the contribution of oil and gas production came from the oil and gas block assets of the company and its affiliates, namely PT Pertamina EP, PT Pertamina EP Cepu (PEPC), PT Pertamina Hulu Indonesia, PT Pertamina Internasional EP, and several other companies. Asset companies spread at home and abroad.

PEPC

"This achievement is 147 thousand BOEPD from international oil and gas fields and 713 thousand BOEPD from domestic. We are grateful that for the first quarter of 2021, we were able to hold back the rate of decline in natural products in the majority of our fields, "he said.

    He explained that the actual gas production until the end of March was recorded at 2.405 million standard cubic feet per day / MMscfd or 4% above the company's first-quarter target of 2,318 MMScfd. Meanwhile, the realization of ready-to-sell gas production was 1,914 MMscfd. Inline, oil production from domestic oil and gas blocks is also very good.

"Until March 2021, domestic oil production will reach 298 thousand barrels per day (BPD), while the lifting is 290 thousand BPD. We continue to strive to be able to meet the targets that have been set, "added Budiman. Meanwhile, oil production from foreign assets was recorded at 97 thousand BPD and gas 291 MMScfd.

    The company has completed 1,647 kilometers (km) of 2D seismic, 33% higher than the target, and 198 square kilometers (km2) of 3D seismic. For exploration drilling, the company has completed one well and four other wells are still under construction. 

    Next, his party has completed the drilling of 46 development wells and worked on 66 other wells. His party also succeeded in reworking wells with as many as 124 activities or 13% more than the target and Well intervention 2,334 activities from the target of 2,301 activities.

    The existence of organizational changes in Pertamina, especially the formation of Upstream Subholding, has made Pertamina's upstream oil and gas activities more adaptive, agile, and efficient. Through this sub-holding, the synergy of all work areas through regionalization can increase operational excellence, accelerate the business development process, and make decision-making faster and agile due to reduced bureaucratic processes.

"Subholding Upstream Pertamina will continue to strive for optimal performance by trying to maintain production and lifting as well as continuing exploration, development, and innovation activities in all upstream companies to achieve the target this year," said Budiman.

Investor Daily, Page-8, Monday, May 3, 2021.

Pandemic Effects Of The Upper Oil and Gas Load

 

The national oil and gas industry is not yet optimally producing significant results in the first quarter of 2021. The realization of ready-to-sell production is still below the target.

Blogger Agus Purnomo in SKK Migas

Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said the realization of ready-to-sell production or oil and gas lifting during the first quarter of 2021 was 1,665.25 Mboepd or 97.3% of this year's APBN target of 1,711.78 Mboepd.

In detail, the realization of oil lifting in the first quarter of 2021 was recorded at 676,200 barrels per day (BOPD), or only 96% of this year's APBN target of 705,000 BOPD. Likewise, the realization of natural gas lifting in the first quarter of 2021 was 5,539 MMScfd, or 98.2% of the APBN target of 5,638 MMscfd.

“From the oil side, the entry point at the end of 2020 is very low. At that time it was 699 MBOPD and because there was a decrease in investment, the level of production was not appropriate. That is one of the factors affecting the performance that was not achieved in the first quarter of 2021, "he said.

Exxon Mobil Cepu Ltd. (EMCL)

Dwi added that oil and condensate production missed plans in several fields. For example in the Banyu Urip field by Exxon Mobil Cepu Ltd. (EMCL) which experienced an increase in water cut and also in the Sukowati Tuban field in East Java by PT Pertamina EP. Dwi said Exxon Mobil Cepu (EMCL) and Pertamina EP contributed to the shortfall in the national lifting target of 10,000 bopd each.

BP

In addition, there has been a decline in the contribution of drilling several wells, namely Pertamina Hulu East Kalimantan and Minarak Brantas Gas. This condition was exacerbated by the unplanned shutdown in the first quarter of 2021 at Train-1 and Train 2 at BP Berau, CPGL Suban Plant, and at BGP Petrochina Jabung.

Petrochina

"We are trying to calculate, the year-end outlook will not reach 705,000 bopd, but we are trying to make a strategy for no decline in 2021. We can get closer as possible," Dwi said.

Pertamina EP

Meanwhile, the failure to achieve the realization of natural gas lifting was also partly due to the inability to achieve Pertamina EP production. In addition, there are differences in assumptions related to the completion of the Tangguh Train-3 project.

Dwi said that the Tangguh Train-3 project is assumed to be completed at the beginning of this year under these assumptions. But in reality, the project is declared to be shifted until the end of 2021 and there is a possibility that it will be completed next year.

Meanwhile, the organizational reshuffle that has taken place within the PT Pertamina (Persero) group is considered to be one of the causes for the low-performance achievement of this state-owned company in the upstream oil and gas sector. According to Dwi, this is a natural fit when there is an overhaul of the organizational structure. The reason is that the investment has not been able to take place smoothly.

“Subholding is a cause and a process. That usually happens, but Pertamina has carried out harmonization, "he said.

Based on SKK Migas data, in the first quarter of 2021, the Pertamina group cooperation contract contractors (KKKS) that did not meet the APBN oil lifting target included Pertamina EP which only reached 98.8% of the target, Pertamina Hulu Energi Oses 89% of the target, and Pertamina Hulu East Kalimantan 83.6%. Meanwhile, for the realization of natural gas lifting, only Pertamina EP did not reach the target of the Pertamina group with a realization of 99.8% of the target.

Dwi said SKK Migas has communicated directly with both the parent and the upstream sub-holding Pertamina regarding the investment process in the upstream oil and gas sector. SKK Migas has asked the state-owned company to speed up its investment process.

"In the last meeting, it has been announced that starting this month, the issue of waiting for FID is no longer allowed and it has been implemented. Pertamina has determined and raised the investment limit that can be made in the subsidiary, "he explained. Pertamina has stated that it is ready to increase its investment to increase operational performance by up to 20% this year.

Pertamina's Senior Vice President for Corporate Communications & Investor Relations Agus Suprijanto said that to achieve this target, Pertamina has set a Capital Expenditure / Capex budget of US $ 10.7 billion in 2021, a drastic increase from last year's CAPEX realization prognosis of US $ 4.7 billion.

Agus explained that from the total CAPEX, as much as 46% will be allocated for upstream oil and gas activities as an effort to ensure an increase in production and oil and gas reserves. The addition of oil and gas reserves is targeted to reach 696 MMboe or nearly four times the target of adding reserves last year.

Meanwhile, 36% of the CAPEX will be allocated to continue the development of refineries and petrochemicals, while the remaining 18% will be used for other business activities, including continuing the development of new and renewable energy.

"The budget shows Pertamina's high optimism to continue to grow and rise amid the Covid-19 pandemic by continuing the projects or business development that had been going on since the previous year and at the same time creating new initiative programs," said Agus.

OLD FIELD

Reforminer Institute founder Pri Agung Rakhmanto argues that lifting is difficult to reach the target because KKKS still continues to rely on old fields, leading to a downward trend.

According to him, the characteristics of the field in addition to the cost per barrel tend to increase and are difficult to predict technically in terms of production operations.

"This is the main technical reason why lifting often does not reach the target. From year to year, we will always struggle with this problem when talking about lifting achievements with the existing fields, "he said.

In connection with the low production of the Pertamina group, Pri Agung assessed that the main cause was not from overhauling the organizational structure through the formation of sub-holding.

"In my opinion, it has nothing to do with the holding sub-holding issue. Lifting is more on short-term managerial issues and operational technical matters, ”he explained.

Executive Director of the National Oil and Gas Companies Association (Aspermigas) Moshe Rizal said that almost all fields in Indonesia have reached their peak production period. So, it is natural for lifting to fall.

Therefore, it needs interventions such as the development of new fields or exploration. In addition, an enhanced oil recovery (EOR) program can be carried out for fields that have entered the secondary or tertiary production phase.

"The problem is that most fields have not prepared the EOR program from an early age so that the development of the EOR program is very expensive and often no longer goes into the field economy," he said.

He added that the low realization of national lifting was also caused by the attitude of investors who are still waiting for the situation to handle Covid-19. Even though the oil price has been very stable above $ 60 per barrel, the situation is still full of uncertainty.

"Investors will focus their investment in areas with lower risk, for example, fields that are already producing and still reduce exploration first," he explained.

Bisnis Indonesia, Page-4, Tuesday, April 27, 2021

January, Upstream Oil and Gas Investment Reaches The US $ 8732 Million

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted that the realization of upstream oil and gas investment in January 2021 reached US $ 873.2 million or 7.05 percent of this year's target of US $ 12.38 billion. This realization is better than the condition in January 2020 which was the only US $ 767.5 million.

Blogger Agus Purnomo in SKK Migas

    Acting Head of Program and Communication Division of SKK Migas Susana Kurniasih said the investment achievement was after the successful completion of the accelerated completion of supporting documents for program implementation at the end of last year.

"So that the realization of investment in January 2021 is higher in number and percentage compared to the same period last year," said Susana.

    Susana explained that the investment realization in January was to support exploration and development activities. These exploration activities were carried out by PT Pertamina EP, PT Pertamina Hulu Mahakam (PHM), ENI East Sepinggan, PT Pertamina Hulu East Kalimantan (PHKT), and PT Pertamina Hulu Energi Offshore South East Sumatra (PHE OSES).

ENI

    Meanwhile, development activities in the form of Well drilling were carried out by PHM, ENI East Sepinggan, Pertamina EP, PT Pertamina Hulu Sanga-Sanga (PHSS), PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ), Petronas Carigali Ketapang II, Exxon Mobile Cepu Limited EMCL, and BP Tangguh.

 Blogger Agus Purnomo in Petronas Carigali Ketapang II

    From the procurement aspect, the 2021 procurement list, which was completed at the end of last year, was able to accelerate the process of procuring goods and services this year.

"In addition, the highest number of procurement packages is in January 2021, so that KKKS (cooperation contract contractors) will have a longer time to carry out operations for upstream oil and gas management," said Susana.

    His party will continue to oversee upstream oil and gas investment this year, including related to licensing and procurement of goods and services. He hopes that the minimum procurement constraints can encourage optimal investment absorption. 

    In addition, his party will coordinate with the Investment Coordinating Board (BKPM) so that this year's upstream oil and gas activity plan can be carried out as planned. He is also optimistic that upstream oil and gas investment this year will be better than last year.

"As world oil prices improve, business players' optimism towards Covid-19 prevention and massive vaccination in various countries including Indonesia, the upstream oil and gas business climate this year will be much better than 2020," said Susana.

    The investment realization also has an impact on the smooth running of upstream oil and gas projects. Of the target of 12 upstream oil and gas projects this year, two projects have started operating in January, namely the KLD ONWJ Project with an investment of US $ 34 million and the gas supply project to the Balikpapan Refinery of US $ 27 million. This month, the US $ 46 million West Pangkah Project is scheduled to start operating.

Investor Daily, Page-10, Wednesday, Feb 24, 2021

Upstream Oil and Gas Investment is US $ 873.2 Million

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) said the realization of upstream oil and gas investment in January 2021 was positive. Investment realization last month was recorded at the US $ 873.2 million or 7.05 percent of the investment target of US $ 12.38 billion this year. 

    Acting Head of Program and Communication Division of SKK Migas Susana Kurniasih revealed that the realization of this investment was higher than the investment achievement in the same period in 2020 which amounted to the US $ 767.5 million or 5.55% of the annual target.

ENI

    Meanwhile, investment realization throughout January 2021 was used to support exploration activities, including by Pertamina EP, Pertamina Hulu Mahakam, ENI East Sepinggan, Pertamina Hulu East Kalimantan, and PHE OSES. In addition, this investment is also used to finance development activities. 

Exxon Mobile Cepu Ltd (EMCL)

    Primarily, the drilling of development wells, such as carried out by Pertamina Hulu Mahakam, Pertamina Hulu Sanga-Sanga, PHE ONWJ, ENI East Sepinggan, Pertamina EP, Petronas Carigali Ketapang II, Exxon Mobile Cepu Ltd (EMCL) and, BP Tanguh.

Blogger Agus Purnomo in Petronas Carigali Ketapang II

BP Tanguh

    Since discussing work, program, and budget (WP&B), SKK Migas claims to continue to coordinate with Cooperation Contract Contractors (KKKS), by conducting supervision and assistance with work program plans that have been approved in WP&B 2021. SKK Migas sees, accelerating the implementation of work programs in KKKS by endeavoring to complete the supporting documents for this year's program implementation has shown good results.

                                Blogger Agus Purnomo in SKK Migas

"So, the investment realization in January 2021 is higher in number and percentage compared to the same period last year, said Susana.

    SKK Migas and KKKS have also completed the 2021 procurement list at the end of 2020 and are also considered to have a positive impact on efforts to accelerate the process of procuring goods and services this year. 

    In addition, the highest number of procurement packages was in January 2021. As a result, KKKS will have a longer time to carry out operations for upstream oil and gas management. Susana explained, efforts to oversee upstream oil and gas investment were continuously carried out from various aspects, including licensing and procurement of goods and services. SKK Migas hopes that the absence of obstacles in the procurement process will contribute to optimal investment absorption.

    Indeed, investment requires support from various related agencies. On that basis, SKK Migas continues to carry out intensive coordination including with the Investment Coordinating Board (BKPM) so that the 2021 work program can be carried out according to the target. 

    SKK Migas is also optimistic that investment realization in 2021 will be better than in 2020. This is in line with the continuing improvement in world oil prices and optimism among business players towards the prevention of Covid-19.

"As well as the implementation of massive vaccinations in various countries including Indonesia, the upstream oil and gas business climate this year will be much better than in 2020," said Susana.

    The improved investment realization also had an impact on the smooth running of upstream oil and gas projects. Of the 12 onstream upstream oil and gas project targets, in January 2021 there were two onstream projects, namely the KLD ONWJ project with an investment value of US $ 34 million and the gas supply project to Pertamina Refinery Unit 5 Balikpapan with an investment value of US $ 27 million.

"In February 2021, the West Pangkah project is planned to be onstream with an investment of US $ 46 million," concluded Susana.

Kontan, Page-13, Tuesday, Feb 23, 2021

Negotiations to be completed in March 2021

 

    The negotiation process between PT Chevron Pacific Indonesia and Eni for the transfer of management of the Indonesia Deepwater Development project is targeted to be completed by March 2021. 

PT Chevron Pacific Indonesia

    Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Julius Wiratno said that his party hopes the Indonesia Deepwater Development project (IDD) will immediately get new partners so that project implementation can be carried out quickly.

Blogger Agus Purnomo in SKK Migas

"It is hoped that the IDD will be completed by the end of March. Hopefully, the B to B will run smoothly, "he said.

    Chevron Pacific Indonesia Corporate Communication Manager Sonitha Poernomo said that his party is still working with SKK Migas and potential partners to continue realizing the potential of the IDD project.

Sonitha Poernomo

"However, according to policy we cannot provide detailed information on commercial negotiations," said Sonitha Poernomo.

    Head of SKK Migas Dwi Soetjipto said that Chevron had applied for a data opening permit to find new investors since July 2019 and was submitted again in February 2020. Dwi revealed that ENI was one of the most potential partners for the project.

"New operators can start proposing an extension of the Work Area and at the same time finalizing the discussion on the proposed revision of the IDD POD-I," he said.

    In other developments, SKK Migas noted that the realization of oil and gas investment as of January 2021 had reached the US $ 873.2 million. Acting Head of Program and Communication Division of SKK Migas Susana Kurniasih explained that the realization was 7.05 percent of this year's investment target of US $ 2.38 billion. This achievement is even better than the realization of investment in the same period last year which was valued at the US $ 767.5 million or 5.55% of the target.

Susana Kurniasih

    Susana explained investment realization during January 2021 was used to support exploration activities, including those carried out by Pertamina EP, Pertamina Hulu Mahakam (PHM), ENI East Sepinggan, Pertamina Hulu East Kalimantan, and PHE OSES. Investments are also used to finance development activities, particularly to finance development well drilling activities.

Bisnis Indonesia, Page-4, Tuesday, Feb 23, 2021

Pertamina EP Sangatta well reaches production of 415 BPH

 

    PT Pertamina EP Asset 5 Sangatta Field (PEP) recorded oil production of 415 barrels per day (bpd) from the ST-200 well at the end of drilling on January 30, 2021. This product is three times higher than the predicted figure from the well as of December 28. 2020.

    Sangatta Field Manager Hanif Setiawan said the successful production of the ST-200 well is the hard work of various parties that work together between PEP Sangatta, partners, PDSI, local government, and community members.

"The success of the ST-200 is proof that the synergy between lines including with stakeholders and running an unusual business operation by adapting a pandemic situation through a good COVID-19 protocol not only provides additional oil and gas production but more than that safety and health is maintained. , "said Hanif.

    Drilling of the ST-200 well located in Topo Indah Hamlet, Sangatta Selatan Village, Sangatta Selatan District, East Kutai Regency is carried out to a final depth of 2,203 meters Measure Depth (mMD) /2,076 meters True Vertical Depth (mTVD). Drilling uses rig 22.2 / OW700-M owned by Pertamina Drilling Services Indonesia (PDSI).

    PEP Sangatta continues to make the best efforts in the Well drilling process by maintaining strict health protocols from the start of preparation until drilling is carried out. The crew involved in this drilling has passed the COVID-19 health protocol screening implemented at Pertamina EP (PEP) and the local government.

    The HSSE aspect remains a full concern during the drilling process of the ST-200 well. HSSE aspects are ensured to be fulfilled for the safety and security of all parties involved. PEP Sangatta will continue to maintain and increase production through further Well drilling. 

    As a form of gratitude for the achievement of the ST-200 well drilling, PEP Sangatta distributed groceries to the people of RT 01 and RT 02 of Topo Indah Hamlet, Sangatta Selatan Village, and renovated one of the prayer rooms not far from the drilling location.

   The Head of Topo Indah Hamlet, Sulaiman expressed his gratitude to PEP Sangatta because, in addition to the residents getting assistance, some residents are also involved as drilling workers, both skilled and non-skill.

"Hopefully this Wells drilling and beyond will be successful and bring blessings. Pertamina Jaya !, "said Sulaiman.

Blogger Agus Purnomo in SKK Migas

    As a subsidiary of PT Pertamina (Persero) as well as a cooperation contract contractor (KKKS) operating under the supervision of SKK Migas, PEP is committed to meeting the country's energy needs through the management of oil and gas fields in various regions, one of which is Kalimantan. PEP, through the PEP Asset 5 operating unit, will drill 50 development wells and carry out the work of the plan for reworking the wells for 2021 drilling 18 development wells and five well rework plans.

    This activity is carried out to support SKK Migas' ideals of realizing 1 million bpd of oil production and 12 billion standard cubic feet of gas per day by 2030. Based on the SKK Migas Integrated Operating System (SOT) report dated February 4, 2021, year-to-date, PEP Asset 5 able to carve crude oil production from Kalimantan amounting to 16,172 bpd. 

Sanga-sanga Block

    Meanwhile, gas production is around 15.44 million standard cubic feet per day. 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). Sangatta Field throughout 2020 recorded an oil lifting of 696,065 barrels of oil or 101% of the target. Production was recorded at 682,734 barrels of oil or 110% of the target.

Investor Daily, Page-10, Tuesday, Feb 9, 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