Accelerating EOR Implementation, Oil and Gas Companies are Encouraged to Partner

    Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif encourages oil and gas companies to cooperate with other parties to realize advanced oil recovery (EOR) activities. The implementation of this activity is one way to achieve the oil production target of 1 million barrels per day (BPD) in 2030.

    Arifin said that accelerating the implementation of advanced production, both secondary and tertiary recovery, needs to be done to achieve the oil production target of 1 million bpd and gas 12 Billion Standard Cubic Feet Per Day/BSCFD by 2030. This acceleration is expected to provide additional contributions to national oil production. For this reason, cooperation contract contractors (KKKS) are encouraged to partner with other parties so that the EOR project can be started immediately.

“To realize the goals in 2030, several EOR projects must be planned and carried out immediately. The government also encourages KKKS to establish strategic cooperation with other parties who have competence and experience in the development and implementation of EOR," said Arifin.

Blogger Agus Purnomo in SKK Migas

    Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said that there were 23 EOR projects scheduled to operate in stages until 2030. Regarding the progress of the EOR implementation, 23 fields are still in the study stage. Meanwhile, one field is working on a field trial and one field is in the process of discussing a development plan (POD).

    Of the 23 EOR projects, most of them are Pertamina Group projects. In detail, PT Pertamina Hulu Rokan will run 7 EOR projects, PT Pertamina EP 2 projects, PT Pertamina Ogan Komering 2 projects, PT Pertamina Hulu Energi North 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 E&P Indonesia 1 project, and Petrogas 1 project. Referring to SKK Migas data, the full scale implementation schedule 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 Hopefully in 2029, and Air Serdang, Guruh, Krisna, and Mudi in 2030.

    Previously, SKK Migas Deputy Operations Julius Wiratno said that his party together with Pertamina were finalizing the POD of EOR implementation in the Rokan Block. One of them is the implementation of surfactant EOR in Minas Field, Rokan Block. The POD is targeted to be approved this year as well. If successful, this step is expected to contribute to the production of the Rokan Block in 2023-2024.

Transfer Manage

    Arifin also revealed the importance of proper and effective management transfer of terminated oil and gas blocks in maintaining national oil and gas production this year, which will also have an impact on the 2030 target. For this reason, Arifin reminded SKK Migas to continue to oversee the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia ( CPI) to PT Pertamina Hulu Rokan (PHR) on 8 August.

PT Chevron Pacific Indonesia ( CPI)

"To maintain the level of national oil and gas production, I have a special message that the transfer of management of the Rokan Block is properly guarded so that the transfer of management process can take place smoothly without disturbing the level of oil production in this block," said Arifin.

    He admitted that this year was very challenging for the upstream oil and gas industry. The realization of oil lifting to date is still at 666.6 thousand BPD and gas at 5,430 million standard cubic feet per day/MMscfd. Meanwhile, the target of the State Revenue and Expenditure Budget is 705 thousand BPD for oil lifting and 5,638 MMScfd for gas.

"2021 will be a year of proving the resilience of the upstream oil and gas industry to maintain production," he said.

    Julius had said that his party was optimistic that oil production in the Rokan Block could rise again despite the transfer of management. The reason is, even now, there are indications of an increase in production by carrying out massive Wells drilling during the operatorship transition period. Next year, the production of this block is expected to return to the level of 175-180 thousand BPD.

    The implementation of Wells drilling is one of the nine issues monitored by SKK Migas in the transfer of management of the Rokan Block. Until now, the realization of drilling development wells in the Rokan Block has reached 83 wells from the target of 180 wells this year. Furthermore, the realization of rework (workover) wells as many as 40 wells from the target of 39 wells, and well services (well services) 5,135 activities out of a target of 6,819 activities.

Investor Daily, Page-10, Thursday, July 29, 2021

Post-Transfer of Management, Production of Rokan Block Is Believed to Increase

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) and PT Pertamina Hulu Rokan (PHR) believe that through the efforts that will be carried out after the transfer of management from PT Chevron Pacific Indonesia (CPI) on August 9, 2021, oil and gas production in the Rokan Block in Riau Province will increase.

the Rokan Block Chevron

    This is the conclusion of the discussion on the theme of Maintaining the Reliability of Operations in the Rokan Region, which was held virtually by the Energy and Mining Editor Society (E2S) in Jakarta. 

Blogger Agus Purnomo In SKK Migas

    Appearing as speakers at the discussion was Deputy Head of SKK Migas Fatar Yani Abdurrahman, PHR President Director Jaffee Arizon Suardin, and Secretary-General of the Indonesian Petroleum Engineering Experts Association (IATMI) Hadi Ismoyo.

“All items have been identified. So now the point is, it must be massive, aggressive, efficient, resilient, tough, and out of the box, beyond normal limits," said Fatar Yani.

    Fatar Yani said the longest contributing oil and gas block in Indonesia and still has attractive potential is the Rokan Block. The Rokan Block has been the backbone of national oil production for 70 years since its first production in 1951 by Chevron. The fate of the block has been determined since 2018. At that time it was still a top producer so the transition process began in a long time.

“So this long transition can be done seamlessly and without any problems. The Rokan Block also has potential reserves in unconventional forms. The most widely operated wells in Rokan, there are 10,000 wells, currently, around 8 thousand are operating," he said.

    According to Fatar, the strategy in managing the Rokan block post-transition for the short term in 2021 is to maintain production and a successful transition to PHR, the 2022-2025 period is an effort to increase production with significant investments including the production of Chemical EOR in Minas. The long-term in 2026 is high production according to PHR Rokan's long-term plan (LTP).

“Considering the enormous contribution of the Rokan block, the Government and SKK Migas have paid attention when this block is in the process of transitioning from contractor PT Chevron Pacific Indonesia (CPI) to PHR. To keep the production of the Rokan block high and optimally maintained, a Head of Agreement (HOA) has been signed between SKK Migas and CPI on September 28, 2020," said Fatar.

    On the other hand, the Rokan PSC does not manage ASR backups. Thus, maintaining the production level of the Rokan WK is very dependent on the return of investment costs. The Head Of Agreement (HOA) agreement, it will guarantee the availability of ASR funds and the return of investment costs can be guaranteed. The number of drilling programs during the transfer of management at HOA was 192 wells.

"However, considering the existing developments, the drilling target has not been achieved. SKK Migas has coordinated with PHR to boost well drilling so that the 2021 production and lifting targets can be achieved," said Fatar.

    PHR President Director Jaffee Arizon Suardin expressed his gratitude for the support and contribution of SKK Migas in the transfer of the management process. With the support from SKK Migas, the transfer of management process is more certain and there is a guarantee, this can be seen from the current process which is felt to be very helpful when managed by PHR.

“Drilling is one of the efforts to maintain the production of the Rokan block, from the target of 192 wells that were previously conveyed by the Deputy Head of SKK Migas, which could not be realized by existing operators, PHR will continue, including the wells planned by PHR. We estimate that assuming 70 wells cannot be completed during the transfer of management, the number of wells that can be drilled until December 2021 will reach around 164 wells," said Jaffe.

    Jaffee said the Rokan Block is different from other blocks because it supports 24% of national oil production. And there are 104 fields spread from north to south.

“This is what we have to manage so that production can be maintained. There are nine priority areas of management transfer. We will continue what has not been completed, starting August 9, with the aim that by 2021 the number of wells will not be less than planned," said Jaffee.

    The former Deputy for Planning of SKK Migas also said that PHR would drill and prepare resources for 161 wells with the assumption that 77 wells had not been completed by the existing operator. Currently, preparations are ongoing. Pertamina has prepared around 16-17 rigs and materials. In fact, these rigs and materials can be used before August 9 to help the existing wells that are being worked on by the operator.

"The goal is that the transfer of management process can run smoothly without interruption," he said.

    According to Jaffee, Pertamina is committed to exploring all existing potentials massively, aggressively, and efficiently. And prepare not only wells to be drilled in 2021, but also in 2022.

“Not chasing the number of wells, we want the number of wells to be the least but the production to be the largest. In this block, many wells are needed,” he said.

    Meanwhile, the Secretary-General of IATMI who is also the President Director of PT Petrogas Jatim Utama Cendana Hadi Ismoyo highlighted the distribution of 10% Participating Interest / PI shares to regions through Regional Owned Enterprises (BUMD), including in the Rokan Block later.

“The challenges include the need for oil and gas professionals to implement 10% PI governance. BUMD managers must be slim and agile, as well as fast in making and processing strategic decisions," said Hadi.

    According to him, the current challenge is the fact that on the ground there are many 10% PIs for various reasons that have not been resolved or have not been given to BUMDs in accordance with the mandate of Ministerial Regulation 37, both for technical and non-technical reasons. 

    In addition, the socialization has not reached the root of the spirit of the 10% PI regarding the rights and obligations of each party. There is also a communication leak between operators and BUMD due to different levels of understanding.

Investor Daily, Page-10, Friday, July 23, 2021

Oil and Gas is Still the Mainstay

 

    The oil and gas industry sector is still relied on as one of the supports for depositing state revenues during the ongoing Covid-19 pandemic.

    In the midst of pressures that hit upstream Oil and Gas last year, the Oil industry was still able to provide deposits to the state worth Rp. 70.45 trillion in the form of non-tax state revenues (PNBP).

    This amount is still higher than PNBP from other non-oil and gas Natural Resources (SDA) sectors, namely minerals and coal. In the same period, the mineral and coal sector 'only' provided income to the state of Rp 34.63 trillion.

    Meanwhile, state income from the Oil and Gas sector comes from the state's share of the exploitation results after taking into account the government's obligations in upstream oil and gas business activities in accordance with contracts and provisions of laws and regulations. Income is also obtained from information services for potential auctions of oil and gas working areas and signature bonuses which are the contractor's obligation.

    This year, the dominance of deposits from oil and gas still dominates. The upstream oil and gas sector throughout the first semester of 2021 has supported US$ 6.67 billion or Rp. 96.7 trillion. The realization has even reached 91.7% of the year-long target set in the 2021 State Budget of US$7.28 billion.

Blogger Agus Purnomo in SKK Migas)

    Head of the Special Task Force for Oil and Gas (SKK Migas) Dwi Soetjipto said that the realization of state revenues could not be separated from oil prices which gradually improved after falling in 2020. With current achievements, Dwi believes state revenues from the upstream oil and gas sector by the end of 2021 will reached Rp. 154 trillion.

"ICP prices show an increase, even as of June 2021 reaching the US $ 70.23 per barrel. We will use this momentum optimally to encourage KKKS to be more aggressive in realizing operational activities," said Dwi.

    For your information, the 2021 State Budget sets the ICP assumption this year at US$ 45 per barrel so that the revenue target set has the potential to be exceeded long before the end of the year. Dwi added that the maximum state revenue is also an effort to optimize upstream oil and gas activities and costs. Activities carried out include selecting work order and maintenance priorities, as well as efficiency in operational activities, particularly due to activity restrictions.

"This effort succeeded in bringing the cost per barrel in the first semester of 2021 to US$ 12.17 per barrel of equivalent oil, lower than the first semester of 2020 of US$ 13.71 per barrel of equivalent oil," explained Dwi.

    Meanwhile, Energy Watch Executive Director Mamit Setiawan believes that the Oil and Gas sector is indeed the backbone of state revenue, both in terms of PNBP and taxes. Moreover, oil prices are in a very good position. According to Mamit, to keep this industry in good condition and attractive, there needs to be another relaxation by the government, especially from a fiscal perspective.

“If it is possible to foster an investment climate that leads to an increase in income, especially PNBP, there is nothing wrong with the government reducing its revenue. It is the same when the government makes a decision to reduce revenue when the gas price is US$6 per MMBtu,” he said.

    He added that the government needs to make a few sacrifices so that our investment climate is attractive and attractive compared to other neighboring countries such as Vietnam and Thailand.

"Besides that, I think legal certainty needs to be rushed in relation to the revision of the law which is currently unfinished," said Mamit.

    The founder of the ReforMiner Institute, Pri Agung Rakhmanto, assessed that if you want the Oil and Gas sector to be more useful, it doesn't need to always be directed as a PNBP producer. According to him, the Oil and Gas sector must first be encouraged to become an economic driver in a broad sense.

"From there, a multiplier effect will be generated for the movement of other related sectors, requiring labor which will ultimately increase tax revenue," he said.

ROKAN BLOCK

    In another development, PT Pertamina (Persero) through PT Pertamina Hulu Rokan (PHR) will drill as many as 161 wells after the transfer of management in the Rokan Block which will begin on August 9, 2021.

PHR

    Pertamina Hulu President Director Rokan Jaffee Suardin said in addition to the planned number of Wells drilling this year, his party would continue the drilling commitments that had been signed by PT Chevron Pacific Indonesia (CPI). 

PT Chevron Pacific Indonesia (CPI)

    Jaffee said that there will be an additional 77 Wells from CPI's commitment which will not be completed until the management transfer period on August 9th. In the previous target, Pertamina planned to drill only 84 wells for 2021.

"As of December 161 wells, the target production level is maintained and can increase," said Jaffee.

    According to him, PT Pertamina Hulu Rokan (PHR) has prepared the resources needed to realize the plan. To smooth the Wells drilling plan, as many as 16 to 17 rigs have been prepared. In addition, Jaffee said that human resources and supporting materials have been fully prepared so that when the transition period is over, all activities can start immediately.

“So the goal is that the transfer of management process will run smoothly without any disturbance. We have a target for the lifting to increase with a massive work program," he said.

    Deputy Head of SKK Migas Fatar Yani Abdurrahman said that CPI's failure to achieve drilling during the Rokan Block transition period was due to the difficulty of procuring the number of rigs. According to Fatar, CPI only has about 10 months from signing the investment commitment in the Rokan Block which was signed in September 2020. For the drilling, CPI should have required 10 rigs, but in practice, there are only 6 rigs available.

“Not to mention that the preparation for drilling will take 2 to 3 months. Therefore, we took the initiative to make one program only," he explained.

Bisnis Indonesia, Page-6, Friday, July 23, 2021

2022, Rokan Block Oil Production is Projected to Increase

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the Rokan Block oil production could be increased to 175-180 thousand barrels per day (BPD) in 2022 after the management shifted to PT Pertamina Hulu Rokan (PHR) in August this. The increase in production was obtained from Well drilling, and the implementation of advanced oil recovery (EOR).

Blogger Agus Purnomo in SKK Migas

    SKK Migas Deputy for Operations Julius Wiratno is optimistic that oil production in the Rokan Block can rise again despite the transfer of management. The reason is, even now, there are indications of an increase in production by doing well drilling during the operatorship transition period. In the ongoing discussion of the 2022 work plan and budget (WP&B), there are also indications that oil production will increase next year.

"The estimate may be that it will return to 175-180 thousand BPD, with massive development, of course, it will directly contribute to production and lifting," he said.

The Rokan Block by Chevron

    The implementation of Well drilling is one of the nine issues monitored by SKK Migas in the transfer of management of the Rokan Block. Until now, the realization of drilling development wells in the Rokan Block has reached 83 wells from the target of 180 wells this year. 

    Furthermore, the realization of work over (workover) wells as many as 40 wells from a target of 39 wells, and well services (well services) 5,135 activities from a target of 6,819 activities.

    In the following years, Julius also believes that the Rokan Block's oil production will continue to increase. The reason is that Pertamina will apply surfactant EOR technology in the block. The Plan of Development/POD for the implementation of EOR is targeted to be approved this year.

"We are working hard for the approval of this EOR POD so that it can be implemented immediately with suitable chemicals and can support it towards full scale as soon as possible," he said.

    He hopes that the implementation of EOR in Minas Field, Rokan Block can be successful. If successful, this step is expected to contribute to the production of the Rokan Block in 2023-2024.

"Perhaps this [Rokan Block] will be an example of an oil and gas block taken by Pertamina whose production does not decrease, but instead increases," said Julius.

    EOR implementation is also one of nine issues monitored by SKK Migas. So far, the data transfer and the conversional chemical EOR model have been completed. Meanwhile, the procurement of surfactant (surfactant chemical) to be used in EOR activities is still in process. 

    At the time of signing the Rokan Block contract, the implementation of EOR activities was also one of Pertamina's commitments. This is as stated in the Decree of the Minister of Energy and Mineral Resources 1923K/10/MEM/2018. Some of these activities are the US$ 4 million EOR study, US$ 247 million stage-1 CEOR 7 pattern, and stage-1 steam flood Kulin or Rantau Bais US$ 88.6 million.

Going Smoothly

    Regarding the transfer of management of the Rokan Block in August this year, the Head of SKK Migas Dwi is optimistic that it will run smoothly.

“The main issue, namely the migration of technical and operational data, has made 94% progress. So we are sure that it can be completed in August,” said Dwi.

    So far, the data catalog and verification have been completed, but they are still waiting for a review and BAP from the Data and Information Center (Pusdatin) of the Ministry of Energy and Mineral Resources. Next, he said the development of the Rokan Block contract management had reached 97%. 

    A total of 282 of the 290 existing contracts have completed the mirroring process. The procurement of materials for 192 has been completed, as well as the procurement of 4 rigs in progress and 3 rigs in the process of the farm in. The progress of electricity, steam, and gas supply has also reached 80%.

“Where PLN has made an agreement with PHR for the supply of electricity and steam. And PLN already has a sales purchase agreement (SPA) with MCTN," said Dwi.

    MCTN or PT Mandau Cipta Tenaga Nusantara is the owner of the power plant that supplies electricity to the Rokan Block. Regarding employment, 99% of workers have received offers from PHR, and the addition of 125 new positions in the PHR Employment Plan (RPTK). Next, the transfer of information technology has reached 83% where a total of 232 applications are needed. 

    In detail, 31 CPI applications were replaced by Pertamina applications, then of the 129 CPI applications that are still in use, 88 applications have been approved and 41 applications are under discussion, and 72 commercial applications are provided by PHR.

PHR

    Then, the licensing and operating procedures have reached 98%. Environmental Impact Analysis (EIA/Amdal) has been completed for two locations, and another location is still in process. In addition, 7,611 standard operating procedures (SOPs) have been submitted from CPI to PHR.

CPI

"Environmental issues are 100% complete, where the environmental audit and program have been prepared and are waiting for a clean declaration from the KLHK (Ministry of Environment and Forestry)," said Dwi.

    In principle, as many as 157 Environmental Function Recovery Plans (RPFLH) have been completed. The Rokan Block is one of the largest oil and gas blocks in Indonesia. However, the production of this oil and gas block continues to decline. Referring to SKK Migas data, in 2011, the Rokan Block still produced around 356.98 thousand BPD of oil or contributed 39.56% of the total national oil production at that time of 902.35 BPD. 

    However, last year, oil lifting in this block was only around 174,424 BPD or 24.62% of the total national oil lifting of 708,488 BPD. As of June, the realization of the Rokan Block production was recorded at 160,646 BPD or 97.4% compared to the lifting target of the State Budget (APBN) is 165 thousand BPD.

Investor Daily, Page-10, Thursday, July 22, 2021

PLN DOMINATES ROKAN'S ELECTRICITY SUPPLY

    PT PLN (Persero) is preparing to control the electricity supply for the Rokan Block after signing a share purchase agreement with PT Mandau Cipta Tenaga Nusantara MCTN), which has been supplying energy for the legendary oil and gas working area.

    PLN President Director Zulkifli Zaini said that with this signing, 100% of PT Mandau Cipta Tenaga Nusantara (MCTN) shares will be owned by PLN. Meanwhile, MCTN is an electricity company owned by Chevron Standard Limited (CSL).

    Through this acquisition, PLN will utilize the gas power plant (PLTG) North Duri Cogen with a capacity of 300 megawatts (MW) previously owned by MCTN to ensure the availability of electricity and steam supply to the Rokan Block during the transition period.

"We will supply electricity and steam to the Rokan Working Area from the PLN side in two stages," he said.

The Rokan Block Chevron

    First, short-term power supply. After the acquisition of MCTN shares, the company's operations will continue for a 3 year transition period. Second, the supply of electricity for the long term. PLN will interconnect the electricity system in the Rokan Block with the Sumatra electricity system.

    PLN's Director of Commerce and Customer Management Bob Sariel said the acquisition was very important for the operation of the Rokan Block. This is done to ensure that the electricity supply does not stop after the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan on August 8, 2021.

PT Chevron Pacific Indonesia (CPI)

“If you want to build a network, it takes 2 years to replace the object or 1 year to relocate. If there is a 1.5-year time lag that causes electricity to be unable to flow to Rokan, of course, the oil Working Area in the Rokan Block will experience a decrease in production, "he said.

    In addition, the acquisition decision is also considered to be better than just entering into a power purchase contract with MCTN or renting the power plant. Moreover, MCTN is the only one that can supply electricity to the Rokan Block.

    After a 3-year transition period, the Rokan Block's electricity needs will be supplied from a more reliable Sumatran electricity system. According to Bob, Sumatra's electricity system has a very strong supply with supplies from a number of steam power plants (PLTU), hydroelectric power plants (PLTA), and geothermal power plants (PLTP) in the region. Currently, the company is building a 500 kV transmission network to strengthen Sumatra's electricity system.

    Regarding investment to support electricity supply to the Rokan Block, PLN has allocated around Rp11 trillion. However, Bob has not been able to reveal more details about the acquisition value of MCTN shares on the grounds that they are still bound by a non-disclosure agreement (NDA). 

    The contents of the MCTN share sale and purchase agreement can only be opened after the administrative and financial processes are completed approximately 1 month after the signing of the share purchase agreement. What is clear, the acquisition funds will come from internal PLN.

Jennifer Ferratt

    Regional Director of Chevron Standard Limited Jennifer Ferratt said that with the completion of the share sale and purchase process, the company is committed to creating a smooth transition in MCTN and in line with the transition of the Rokan Block to Pertamina Hulu Rokan (PHR).

"We would like to thank PLN for working with CSL to achieve fair and mutually beneficial results," said Jennifer.

    Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif added that the Rokan Block has huge potential for oil reserves. Therefore, to be able to provide maximum benefits for the country, a good strategy is needed.

"PLN must ensure a guarantee of electricity supply for the Rokan Block so that Pertamina is able to maintain the sustainability of the production of 25% of the national oil," he said.

    Meanwhile, Deputy Minister I of SOEs Pahala Nugraha Mansury hopes that the follow-up to this sale and purchase agreement will run smoothly and in tandem with the management transfer process which will take place soon.

“The Rokan Block is very strategic for Indonesia because it produces 25% of the national oil production. So far, the majority of electrical energy has been supplied by power plants owned by MCTN, so this agreement is very important to ensure the supply of electricity for the Rokan Block in the future," said Pahala.

    Meanwhile, the acquisition of MCTN shares is a follow-up to the cooperation agreement between PLN and Pertamina Hulu Rokan which was included in the memorandum of understanding for the cooperation in providing electricity and steam in the Rokan Working Area on December 30, 2020, and the sale and purchase agreement for electricity and steam on January 29. 2021.

Pertamina Hulu Rokan (PHR)

BUSINESS EFFICIENCY

    President Director of Pertamina Hulu Rokan (PHR) Jaffee A. Suardin said with this commitment, Pertamina's position would be even stronger because it had ensured the continuity of the Rokan Block's operational activities.

"The presence of PLN for electricity in the Oil Working Area in the Rokan Block is a form of good BUMN synergy, with the hope of increasing business efficiency, especially related to electricity and steam costs which can be more economical and efficient, so as to be able to support the development of Pertamina Hulu Rokan (PHR) oil wells." Pertamina Hulu Rokan (PHR) with better economies of scale," he said.

    Meanwhile, the demand for electricity and steam in the Rokan Block Oil Working Area is 400 MW and 335,000 barrels of steam per day (Mbspd). Most of these needs are supplied from the 270 MW and 265 Mbspd MCTN plants and the remaining needs are met from the Rokan Block Oil Working Area internal generator.

    The electricity and steam supply is to maintain the continuity of oil production in the Rokan Block Working Area which is expected to be maintained at around 160,000 thousand barrels per day this year with the addition of new wells being drilled. Currently, the Rokan Block production is recorded at 162,951 barrels per day, which is the second-largest production after the Cepu Block in East Java, Indonesia.

    Energy Watch Executive Director Mamit Setiawan explained that the process of signing a share purchase agreement between PLN and MCTN was a new step in the Rokan Block transition process. According to him, through this process, the problem of electricity and steam supply for the Rokan Block can be resolved in the future.

"SOE synergy between Pertamina and PLN is a strategic step in developing and helping fellow SOEs considering the Rokan Block is the backbone of national oil production," said Mamit.

Bisnis Indonesia, Page-4, Wednesday, July 7, 2021

Electricity Supply for Rokan Block, PLN Officially Acquires MCTN Shares

    PT Perusahaan Listrik Negara (PLN) (Persero) officially acquired 100% shares of PT Mandau Cipta Tenaga Nusantara (MCTN) which is owned by Chevron Standard Limited. 

    This acquisition is proof of PLN's commitment to maintaining the continuity of the Rokan Block electricity supply, both during the transition period and in the long term. Moreover, the Rokan Block is the backbone of national oil production.

The Rokan Block Chevron

    The acquisition process was marked by the signing of a sales and purchase agreement (SPA) by the Director of Commerce and Customer Management of PLN, Bob Sariel, and Regional Director of Chevron Standard Limited, Jennifer Ferratt, online.

Director of Chevron Standard Limited, Jennifer Ferratt

    This agreement was also witnessed by Minister of Energy and Mineral Resources Arifin Tasrif, Deputy Minister I of BUMN Pahala Nugraha Mansury, Head of SKK Migas Dwi Soetjipto, President Commissioner of PLN Amien Sunaryadi, President Director of PLN Zulkifli Zaini, and the management of Chevron Standard Limited as the majority shareholder of MCTN.

Blogger Agus Purnomo in SKK Migas

    Zulkifli said that the acquisition of the MCTN shares is proof of PLN's commitment to maintaining the continuity of the Rokan Block electricity supply, both during the transition period and in the long term. Moreover, the Rokan Block is the backbone of national oil production.

the Rokan Block Chevron

    As is known, the management of the Rokan Block from August 9, 2021, will shift from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan (PHR). So far, the electricity and steam supply for the Rokan Block comes from the North Duri Cogen Gas Power Plant (PLTG) with a capacity of 300 Megawatts (MW) which was previously owned by MCTN, a subsidiary of Chevron Standard Limited (CSL).

PT Chevron Pacific Indonesia (CPI)

"We would like to thank Chevron Standard Limited (CSL) for the good cooperation and for the good electricity in the Rokan Work Area as long as it is managed by Chevron Pacific Indonesia," said Zulkifli virtually in Jakarta.

    The acquisition of MCTN shares is a follow-up to the cooperation agreement between PLN and PT Pertamina Hulu Rokan (PHR) which was included in the Memorandum of Understanding (MOU) for the Provision of Electricity and Steam for the Rokan Region on December 30, 2020, and the Sale and Purchase Agreement for Electricity and Steam on January 29, 2021.

    Zulkifli hopes that, through the signing of the sale and purchase of shares, a good partnership can be established as the first step in building partnerships and cooperation between PLN and Chevron Standard Limited (CSL) in the future. 

    In the future, this power plant will be used for three years to serve electricity needs in the Rokan Block. Both during the transition period together with PLTG Migas and Central Duri until finally it will be supplied from the Sumatra interconnection system.

“In the long term, reliable and competitive supply of 400 MW of electricity in the Rokan Block will be supplied from the Sumatra and 335 MBSPD Steam system using the New Steam Generator. Within 3 years the interconnection of the system and the New Steam Generator will be fully operational," he added.

    In addition, the provision of reliable electricity supply from the Sumatra System to the Rokan Block is carried out from three sources.

"PLN prioritizes aspects of safety, reliability, quality, and efficiency in meeting the energy needs of the upstream oil and gas industry," he said.

    PLN as a BUMN that is given the mandate in the electricity sector, has an obligation to meet electricity needs and provide the best service for all customers, including industrial customers, one of which is the oil and gas sector, both from upstream and downstream.

“PLN as the most experienced electricity provider in Indonesia has a special design and strategy in providing electricity for the oil and gas industry. Currently and in future plans, PLN's large systems such as Java, Sumatra, Kalimantan, and Sulawesi have a very large reserve margin (40-50%) to be able to serve the needs of the oil and gas industry," said Zulkifli.

    Regional Director of Chevron Standard Limited, Jennifer Ferratt said, with the completion of this process, it is hoped that the transition at MCTN can take place smoothly and in line with the transition of the Rokan Block to PT Pertamina Hulu Rokan (PHR).

    Minister of Energy and Mineral Resources Arifin Tasrif added that the Rokan Block has huge potential for oil reserves. Therefore, to be able to provide maximum benefits for the country, a good strategy is needed. With this agreement, PLN will continue to use the North Duri Cogen PLTG before the Rokan WKB electricity supply is supplied by the Sumatra system interconnection network.

“PLN must ensure a guaranteed electricity supply for the Rokan Block so that Pertamina is able to maintain the sustainability of the production of 25% of the national oil. Therefore, power plants must be reliable with more efficient costs, so that they can provide much better benefits for the nation and state," he said.

    The Deputy Minister of State-Owned Enterprises, Pahala Nugraha Mansury, also appreciated PLN and CSL for successfully completing the transfer of ownership of MCTN. He also hopes that the transition process in this one month can go hand in hand with the Rokan working area from Chevron to Pertamina smoothly.

“The Rokan Block is very strategic for Indonesia because it produces 25% of the national oil production. So far, the majority of electrical energy has been supplied by MCTN's power plants. So this agreement is very important to ensure the electricity supply for the Rokan Block in the future," he added.

Support Pertamina's Production

    Meanwhile, Pertamina expressed its appreciation for the signing of the SPA to fulfill the electricity needs of the Rokan Working Area (WK).

PT Pertamina Hulu Rokan (PHR)

"Pertamina appreciates the agreement process between Chevron Standard Limited and PLN related to efforts to meet the electricity needs for Rokan WK," said PT Pertamina Hulu Rokan (PHR) President Director Jaffee A. Suardi.

    Furthermore, Jaffee added that this commitment will certainly strengthen Pertamina's position, in this case through PT Pertamina Hulu Rokan (PHR), to ensure the continuity of production of the Rokan Oil and Gas Block Working Area, which of course contributes significantly to national oil and gas production.

Investor Daily, Page-10, Wednesday, July 7, 2021

Pertagas Optimistic Rokan Pipe Completed On Time

    PT Pertamina Gas (Pertagas), a subsidiary of PT Perusahaan Gas Negara (PGN) Tbk, is optimistic that it will be able to complete the oil pipeline project in the Rokan Block on time in early 2022. This pipeline is needed to keep the Rokan Block oil production stable when its management is transferred to PT Pertamina (Persero) in August.

The Rokan Block Chevron

    Pertagas Communication, Relations & CSR Manager Elok Riani Ariza said, according to government directives, strategic project construction activities must continue, including the construction of the Rokan Oil Pipeline block. His party strives for this national strategic project to be completed on time.

"As of the end of June, the construction progress has reached 71.33%," said Elok.

The Rokan Block Chevron

    The Rokan Block Oil Pipeline has the potential to flow around 200-265 thousand barrels of oil per day (BPD). The project is targeted for commercial operation in stages until it is fully completed in early 2022.

    The North Block, which includes the Balam-Bangko-Dumai Corridor, is targeted to operate in the third quarter of 2021. Then the South Block, namely Minas-Duri, is targeted to operate in the 1st Quarter of 2022. The Rokan Block Pipe Project has a diameter of 4-24 inches. The pipeline consists of 12 segments and three stations, namely Duri Station, Dumai, and Manifold Batang.

    In each pipe segment, there is a pig launcher and receiver including accessories. The pipeline also has a Sectional Break Valve (SBV) in 24 locations, Horizontal Direct Drilling (HDD) in 12 locations, as well as a Leak Detection System for all sections and an Oil Transport & Management System. The pipe is approximately 367 kilometers (km) long and passes through 5 regencies and cities, 14 sub-districts, and 38 villages and sub-districts. Apart from pursuing construction targets, the safety aspect remains Pertagas' main concern.

"The project, which started with first welding on September 10, 2020, has successfully passed 2.18 million safe working hours until June 25, 2021," said Elok.

    To date, the Rokan Oil Pipeline project has recruited 76% of the local workforce of a total of 2,404 workers. This is in accordance with the direction of the Regent of Rokan Hilir Afrizal Sintong when receiving a visit from the Director of Infrastructure and Technology of PGN Achmad Muchtasyar and the Director of Engineering and Operations of Pertagas Rosa Permata Sari at the office of the Regent of Rokan Hilir, City of Bagansiapiapi.

"We hope that this project will have a positive impact on the development of the Riau region in general and be able to contribute significantly to increasing human resource capacity, and transferring knowledge in areas that are passed by the pipeline in particular," said Elok.

    She also hopes that this project can support energy security and contribute positively to improving the national economy. At the same time, the process of managing the Rokan Block continues. Previously, PT Pertamina Hulu Rokan (PHR) stated that the mirroring process for existing contracts has now reached 95% or 276 contracts out of a total of 290 contracts. 

    On the other hand, PT Chevron Pacific Indonesia has completed the PSC termination checklist provisional document on February 25, 2021. In addition, as of May, asset reporting has reached 81%, of which around 109 thousand assets have been physically inspected and reported. While the closing of project reports reached 70% or around 2,940 reports that have been completed.

    Pertamina Hulu President Director Rokan (PHR) Jaffee A Suardin had said that his party was trying to make the transfer of management process run smoothly according to the timeline.

"So that on August 8 and 9, 2021, there will be a seamless management transfer process, without pause, both in terms of operations and support," said Jaffee.

Investor Daily, Page-10, Wednesday, July 6, 2021

PHR Ensures Rokan Block Worker's Transition Runs Smoothly

    PT Pertamina Hulu Rokan (PHR) ensured that the process of transferring the management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) went smoothly. One of the priority aspects is the worker transfer process. PHR has sent an acceptance letter and an employment agreement to all CPI employees.

PT Chevron Pacific Indonesia (CPI)

    As a result, of the 2,700 workers, as many as 98.5% have returned and signed the Work Agreement, and only 1.5% of the workers who did not return it with reasons including because they are nearing retirement age and want to retire early, continue their studies to a higher level of education. height, and other reasons. PHR President Director Jaffee Arizon Suardin welcomed the progress of returning the Acceptance Letter and Employment Agreement by CPI workers.

“Thank you for the positive response given. By joining CPI employees into the Pertamina family, they will have wider career opportunities in the Pertamina Group. I believe, together we can become a solid team, collaborate and synergize to develop the company's business today and in the future to maintain national energy security," said Jaffee.

    Meanwhile, Senior Vice President Rokan Transition CPI Wahyu Budiarto expressed his appreciation to Pertamina and all parties who have supported this process so that the transition went very well.

the Rokan Block Chevron

“The transition in the field of human resources is very important and the most critical in supporting the transfer of management of the Rokan Block. Therefore all steps are prepared together perfectly to achieve a safe, reliable, and smooth transition. Appreciation to Pertamina and all parties who have supported this process so that the transition went very well.” said Revelation.

    PHR has opened a channel of communication for all CPI workers so that all questions can be answered. The channels consist of the Town Hall Meeting which was held online on June 3, 2021 (attended by more than 2000 participants) and June 7, 2021 (attended by more than 2300 participants), Manager Forum on June 9, 2021, which was attended by management levels at CPI. The HC (Human Capital) Corner is an online live event program held every day from June 10, 2021, to June 18, 2021. In addition to these channels, a contact center has also been opened via email to submit personal questions.

Investor Daily, Page-9, Saturday, July 3, 2021