The Merakes Project will be Operated in the Second Quarter of 2021

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is optimistic that the Merakes Field development project, the East Sepinggan Block, will start operating in the second quarter of this year. This project will generate additional gas production of up to 368 million standard cubic feet per day / MMScfd.

Blogger Agus Purnomo in SKK Migas

    Deputy for Operations of SKK Migas Julius Wiratno said that the work on the Merakes Project which was undertaken by ENI East Sepinggan had been delayed due to the Covid-19 pandemic. The main obstacles faced were restrictions on the movement of goods and Human Resources (HR) required by the project. However, ENI and his party are trying to catch up with the delay in this project.

ENI

"Currently, the activities have been carried out smoothly, so that the project progress has reached 88.5% or only 1.5% slower than the target. We are trying to get the first gas project at the end of April 2021, "said Julius.

the Merakes Field

    This year, gas production from the Merakes Field is targeted to reach 345 MMScfd. This gas production will continue to be boosted so that it can reach peak production of up to 368 MMscfd in 2022.

"Gas from this field will be flowed to the Bontang LNG Refinery in East Kalimantan to fulfill existing market commitments," he added.

    The construction of the Merakes Project began in 2019 with an investment fund of US $ 1.3 billion. In the plan of development / POD for the Merakes Project, ENI plans to drill six underwater wells and build a submarine pipeline system that will be connected to the floating production unit / FPU of Jangkrik Field in the Muara Bakau Block. 

Jangkrik Field

    Later, the Merakes Field gas will be sent via the existing pipe from the Jangkrik Field FPU to the Bontang LNG Refinery operated by PT Badak NGL. Similar to the Jangkrik Field, the Merakes Field will also extend the operating life of the Bontang LNG Plant.

    ENI stated that Merakes Field is estimated to have gas reserves of 2 trillion cubic feet in its official statement. This oil and gas potential was discovered after ENI drilled the Merakes-1 well in 2014. Furthermore, in 2017, ENI drilled the Merakes-2 appraisal well. In January, two Projects Completed SKK Migas succeeded in completing two of the 12 oil and gas projects targeted to operate in 2021.

    The two projects are the KLD Project by PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ) with a capacity of 16 MMscfd and the project to divert gas supply from the South Mahakam Field to the Balikpapan Refinery by PT Pertamina Hulu Mahakam (PHM) 50 Mmscfd. According to Julius, these two projects were successfully completed on time, despite the Covid-19 pandemic.

"The timely implementation of these two projects gives confidence that the implementation of other projects that will be carried out in 2021 can be realized on time," said Julius.

    Together with the cooperation contract contractor (KKKS), they are trying to maximize the implementation of activities in the field. One of them is by accelerating the realization of projects that are supposed to be implemented next year to this year.

"I do not promise, but we are trying to accelerate the achievement of activities like last year. This acceleration requires a very large effort, "said Julius.

    Last year, SKK Migas succeeded in realizing the operation of 15 projects out of the targeted 12 projects, even though one project encountered obstacles.

    Julius hopes that acceleration efforts can be carried out considering that current oil prices are improving faster than world predictions so that they can also increase the economic calculation of upstream oil and gas business activities. After the average world oil price in January reached around the US $ 55 per barrel, the oil price reached US $ 63 per barrel this February. 

    Meanwhile, the oil price assumption in the APBN is the US $ 45 per barrel. The total investment for the 12 upstream oil and gas projects which are scheduled to operate this year reaches the US $ 1.7 billion. The 12 projects will provide additional oil production of 28,508 barrels per day (bpd) and gas of 484.2 MMScfd.

Investor Daily, Page-9, Saturday, Feb 20, 2021

SKK Migas Records EOR Commitment of US $ 446 Million

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted a commitment to implementing Enhanced Oil Recovery (EOR) activities of up to the US $ 446 million. 

Blogger Agus Purnomo in SKK Migas

    EOR activities, especially in the Rokan Block, will support the achievement of the oil production target of 1 million barrels per day (BPD) by 2030.

    EOR is an advanced oil recovery method by adding energy in the form of special material or fluid that is not contained in an oil reservoir. Generally, EOR is applied to fields that have long been produced (mature fields) with the aim of extracting remaining oil that cannot be produced by primary and secondary recovery methods (water flooding).

    Some of the most widely known EOR techniques today are injection steam flooding, chemical flooding, and gas flooding. 

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto said the EOR activities to be carried out were water injection and chemical injection. To date, his party has recorded 23 EOR projects using polymers or surfactants which will operate until 2030.

"The firm work commitment (KKP) for EOR to date totals the US $ 466 million," he said.

    Of the 23 EOR projects, his party will focus on its implementation in the Rokan Block. 

the Rokan Block Chevron

    In blocks whose management will shift to Pertamina in August 2021, his party will re-evaluate the existing plan of development / POD and steam injection projects such as in North Duri Development (NDD) 14, Duri Ring, and others. In addition, his party will encourage the completion of Chemical EOR Phase-1 at Minas Field in early 2022.

"The Minas field is the main support for the EOR strategy with an additional production of around 52 thousand BPD in 2030," said Dwi.

    Regarding the progress of EOR implementation, 23 fields are still in the study stage. Meanwhile, one field is currently working on field trials and one field is being discussed on POD. Of the 23 EOR projects, most of them were Pertamina Group projects.

    In details, PT Pertamina Hulu Rokan (PHR) will carry out 7 EOR projects, PT Pertamina EP 2 projects, PT Pertamina Ogan Komering 2 projects, PT Pertamina Hulu Energi Noth West Java (ONWJ) 2 projects, PT Pertamina Hulu Offshore South East Sumatra (OSES) 2 projects , PT Pertamina Hulu Energi Siak 1 project, PT Pertamina Hulu Mahakam 1 project, and PT Pertamina Hulu Energi Tuban 1 project. In addition, BOB Bumi Siak Pusako will work on 1 EOR project, PT Energi Mega Persada (EMP) 1 project, Medco EP Indonesia 1 project, and 1 Petrogas project.

    Referring to SKK Migas data, the schedule for implementing one field (full field) for these EOR projects is Minas and Batang in 2024, Bekasap and E-main in 2025, Zulu in 2026, Tanjung, Rama, and Handil in 2027, Pedada, Sukowati, Gemah, Melibur, and Walio in 2028, Duri Ring, Bekasap, Kulin, Balam South, Bangko, and Kaji Harapan in 2029, as well as Air Serdang, Guruh, Krisna, and Mudi in 2030.

    Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM), Tutuka Ariadji, said that the application of EOR technology is not easy. In order for this EOR project to run smoothly in the long term, a strong research and development institution is needed to support it.

"Backing up research and development is absolute. If there are strong research and development, we can monitor oil and gas production. The oil and gas industry needs technology and competent people. There is no compromise on that, "he said.

    Meanwhile, Ronald Gunawan, Director of the Indonesia Petroleum Association (IPA), said that EOR activities are difficult to carry out under current conditions. This is because, with the current oil price conditions, the project is not economical when referring to the current fiscal scheme in Indonesia. If it is economical, oil and gas companies will certainly do it and boost oil production as much as possible.

Investor Daily, Page-9, Saturday, Feb 6, 2021

Pertamina Hulu Energi Completes KLD Project

 

PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ), a subsidiary of PT Pertamina Hulu Energi (PHE), has completed the KLD Project in the ONWJ Block. This project provides an additional gas supply of 16 million standard cubic feet per day / MMscfd. 

    PHE Development and Production Director Taufik Aditiyawarman said the KLD project was successfully completed three months earlier than the set schedule and without any accidents (zero-incident). This is due to hard work and coordination with various parties, including the project contractor, PT Meindo Elang Indah.

"Gas production from the KLD Field will be used entirely for domestic interests so that it will drive the industrial economy around our working area," he said.

He explained, the KLD Field off the north coast of West Java began construction in April 2019. The KLD project has gone through several stages, including fabrication in the Handil Field, load out and sail away in mid-July 2020, off-monitoring installation, drilling activities, hook up, commissioning, and start-up. According to Taufik, the KLD Field has started distributing gas since December 2020. In early January, PHE ONWJ has completed a performance test period according to production operation parameters.

"From the KLD Field, it is targeted that gas production is 16 MMscfd in the peak production period," said Taufik.

Blogger Agus Purnomo in SKK Migas

Meanwhile, Julius Wiratno, Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), appreciated PHE ONWJ for successfully completing the Project in the midst of difficult conditions. The reason is, last year was a very challenging year where world oil prices were relatively low and the Covid-19 pandemic had an impact on the dynamics of the upstream oil and gas industry and its supporting sectors.

His party will continue to strive to increase supervision and control of field development projects, as well as coordinate with oil and gas companies and other stakeholders to minimize the impact of the pandemic. The success in the KLD Project is expected to be able to encourage PHE to carry out various upstream activities so that it can have an impact on national oil and gas production, including having a chain effect on the economy and employment.

"And in the long term it will support efforts to achieve oil production of 1 million barrels per day and gas of 12 BSCFD (billion standard cubic feet per day) in 2030 to realize national energy security," said Julius.

Referring to SKK Migas data, the KLD Project is included in 12 projects that are planned to start operating this year. The entire project will provide additional oil production of 28,508 bpd and gas of 484.2 MMscfd. The 12 projects are expected to support the achievement of this year's oil production target of 705 thousand BPD and gas 5,638 MMscfd.

Investor Daily, Page-10, Monday, Jan 25, 2021

Two Oil and Gas Blocks will Get Additional Incentives

 

The government will provide additional incentives for the two oil and gas blocks to boost national oil production. This step is expected to be able to provide additional production reserves of oil of 138 million barrels and gas of 1.7 trillion cubic feet.

Blogger Agus Purnomo in SKK Migas

Deputy for Planning for the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Jaffee Arizona Suardin said the massive depletion plan (MDP) is one of the strategies to pursue the oil production target of 1 million barrels per day (bpd) by 2030.

His party is looking for oil and gas potentials that can actually be produced, but require additional incentives to be realized. This step was taken, he explained, because the government is now increasingly flexible in providing incentives for upstream oil and gas industry players. Two oil and gas blocks are candidates for this additional incentive recipient.

"We have discussed it with the government, there has been the approval of additional incentives," he said in a discussion held by the Indonesian Association of Oil and Gas and Geothermal Drilling Entrepreneurs (APMI) in Jakarta.

According to him, the potential for MDP is not only in these two oil and gas blocks. His party is also evaluating three other MDPs with the potential for additional oil and gas reserves of up to more than 200 million barrels of oil equivalent.

"Then we will maximize the oil and gas block so that it returns to its former glory. That way per year, "said Jaffee.

PT Pertamina Hulu Energi (PHE) Vice President for Drilling and Well Intervention, Anto Sunaryanto, said that the existence of MDP has encouraged his party to be more massive in producing existing oil and gas reserves. Moreover, the government is increasingly open to additional incentive options for cooperation contract contractors (KKKS), including additional profit sharing (splits).

"With a better split, we can change more reserves to production," he said.

His party has submitted additional splits to the government for several oil and gas blocks that it manages and is still waiting for an answer. If the additional split decision from the government comes out this December or January next year, it will add more operational activities to be carried out.

"It's not official yet, but I heard the incentive has been approved," said Anto.

Previously, Director of Development and Production of PT Pertamina Hulu Energi (PHE) Taufik Aditiyawarman said additional splits were proposed for the Mahakam Block and the Sanga-Sanga Block. 

the Sanga-Sanga Block

    In addition, his party is still reviewing the proposed changes to the results of the East Kalimantan Block, Offshore North West Java (ONWJ), and Offshore Southeast Sumatra (OSES). 

    The five blocks are termination blocks managed by the company. Taufik had said that if he obtained an improvement in the profit-sharing, his party was committed to increasing the production of the oil and gas block.

"Of course, with a better economy, it will maximize the monetization of the potentials in the oil and gas block, increase reserves and future production," he said.

Pertamina signed the Production Sharing Contract / PSC for the Sanga-Sanga Block, East Kalimantan, and the OSES Block with a gross split scheme in 2018. Likewise, the Mahakam Block PSC amendment uses a cost recovery investment scheme. Meanwhile, the ONWJ Block contract was signed in 2017.

the ONWJ Block 

Referring to the contract, Pertamina's profit-sharing in the Sanga-Sanga Block is set at 49% for oil and 54% for gas. Meanwhile, in the East Kalimantan-Attaka Block, the company gets 61 percent for oil and 66 percent for gas. Furthermore, Pertamina's profit-sharing in the OSES Block is set at 68.5% for oil and 73.5% for gas.

the OSES Block

In the ONWJ Block, Pertamina previously obtained additional splits through ministerial discretion and changes to the gross split scheme. Initially, Pertamina's profit-sharing in this block was 57.5% for oil and 62.5% for gas. At the end of 2017, this revenue-sharing amount increased to 73.5% for oil and 81% for gas. The five termination blocks that Pertamina is working on are included in the list of 10 largest oil and gas producers in Indonesia.

Referring to SKK Migas data, the realization of oil lifting in the Mahakam Block was recorded at 29,361 barrels per day (bpd) of the APBN-Amendment target of 25 thousand bpd and gas of 558 million standard cubic feet per day / MMScfd) of the target of 510 Mmscfd.

Furthermore, the oil lifting of the ONWJ Block was 28,893 bpd from the target of 27,500 bpd and gas of 71 MMScfd from the target of 58 MMScfd. Next, the oil lifting of the OSES Block was 26,542 bpd from the target of 24,010 bpd, East Kalimantan 9,862 bpd from a target of 11,380 bpd, and Sanga-Sanga 12,515 bpd from a target of 12,030 bpd.

Investor Daily, Page-10, Friday, Nov 13, 2020

Split Change as Incentive is the Last Option

    The government is still evaluating PT Pertamina (Persero)'s proposal regarding the addition of profit sharing (splits) in several terminated oil and gas blocks. This is because the addition of a split is the last option as one of the upstream business incentives. 

Arifin Tasrif

    Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said that the addition of a split is not the only form of incentive for the upstream oil and gas business. His party assessed that several regulations regulate various forms of incentives to facilitate this upstream oil and gas business.

"We are currently conducting an evaluation," he said.

Dwi Soetjipto

    Dwi Soetjipto, Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), expressed the same thing. His party is still discussing the proposed additional split between Pertamina and the Ministry of Energy and Mineral Resources. One of them is being studied other incentive options that can replace the addition of this split.

Agus Purnomo in SKK Migas

"We are looking for efforts so that the additional split is the last alternative. So now we are reviewing it, "he said.

    Deputy for Planning of SKK Migas, Jaffee Suardin, revealed that the proposed additional split was through long discussions with his party. The reason is that this proposal was initiated by his party's efforts to seek oil and gas potential that could be developed but had not yet been included in Pertamina's long-term plan. 

    Furthermore, his party issued a recommendation to the Ministry of Energy and Mineral Resources. According to him, this additional split has the potential to generate oil and gas reserves for Indonesia without having to wait for exploration activities to be carried out. Not only that, but this step will also increase the economy of the oil and gas block for up to 10 years.

"What is currently being discussed can add approximately 120 million barrels of oil reserves and 1.7 trillion cubic feet of gas," said Jaffee.

    He said the additional split proposal did not end only for Pertamina. His party will continue to look for oil and gas potentials in other working areas that can be developed in the future.

"The point is, the more aggressive and efficient," he added.

    According to Taufik Aditiyawarman, Director of Development and Production of PT Pertamina Hulu Energi (PHE), the additional split is proposed for the Mahakam Block and the Sanga-Sanga Block. 

    In addition, his party is still reviewing the proposed changes to the results of the East Kalimantan Block, Offshore North West Java (ONWJ), and Offshore Southeast Sumatra (OSES). The five blocks are termination blocks managed by the company. Taufik had said that if he obtained an improvement in the profit-sharing, his party was committed to increasing the production of the oil and gas block.

"Of course, with a better economy, it will maximize the monetization of the potential in the oil and gas block, increase reserves and future production," he said.

the Mahakam Block

    Pertamina signed the Production Sharing Contract / PSC) Sanga-Sanga Block, East Kalimantan, and the OSES Block with the Gross split scheme in 2018. Likewise, the amendment to the Mahakam Block PSC uses a cost recovery investment scheme. The ONWJ Block contract was signed in 2017. 

    Referring to the contract, Pertamina's profit-sharing in the Sanga-Sanga Block is set at 49% for oil and 54% for gas. Meanwhile, in the East Kalimantan-Attaka Block, the company gets 61 percent for oil and 66 percent for gas. Furthermore, Pertamina's profit-sharing in the OSES Block is set at 68.5% for oil and 73.5% for gas.

    In the ONWJ Block, Pertamina previously obtained additional splits through ministerial discretion and changes to the gross split scheme. Initially, Pertamina's profit-sharing in this block was 57.5% for oil and 62.5% for gas. At the end of 2017, this revenue-sharing amount increased to 73.5% for oil and 81% for gas.

Investor Daily, Page-10, Saturday, Nov 7, 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's New Reserves in ONWJ FK-1 Well

The Pertamina Group continues to explore new oil reserves. Pertamina Hulu Energi (PHE) through its subsidiary, Pertamina Hulu Energi Offshore Northwest Java (PHE ONWJ), discovered oil reserves from drilling the FK-1 well development.

PHE's Managing Director, Meidawati said that the current corona outbreak was very challenging. However, PHE still makes every effort to work according to the target Work Plan and Budget (RKAP).

FK-1 wells in Indramayu waters in West Java

One of them is drilling FK-1 wells in Indramayu waters in West Java. ONWJ PHE General Manager Cosmas Supriatna explained, drilling activities at ONWJ were still on schedule and the results were positive.

 "The initial projection of the drilling was 400 bopd, but the Wells test recorded higher results, which yielded 987 bopd. Of course, we are still waiting for the results of the FK-8 Well drilling which is expected to be completed by the end of April, Meidawati said.

Until the first quarter of 2020, PHE ONWJ oil production reached 29,021 bopd, or 10% higher than the RKAP production target in the previous quarter of 26,395 bopd. This oil production achievement also exceeded the target of the State Budget (APBN) which was set at 28,809 bopd.

For the realization of lifting in the first quarter of 2020, PHE ONWJ successfully exceeded 109.4% of the RKAP and passed the state budget target of 100.2%. Throughout this year, PHE ONWJ is targeting oil and gas production of 41,100 boepd, consisting of oil production of 26,400 bopd and 85 mmscfd of gas.

Kontan, Page-13, Tuesday, April 21, 2020