The Government will Facilitate the Acquisition of Oil and Gas Blocks Abroad

    The Ministry of Energy and Mineral Resources (ESDM) stated that it would facilitate the acquisition of oil and gas blocks overseas by oil and gas companies in Indonesia. The acquisition of oil and gas blocks in other countries is one of the government's strategies to pursue the oil production target of 1 million barrels per day (BPD) by 2030.

    Director of Oil and Gas Program Development at the Ministry of Energy and Mineral Resources Dwi Anggoro Ismu Kurnianto said the oil production target of 1 million BPD in 2030 has been included in the Grand National Energy Strategy (GSEN) where the National Energy Council (DEN) is finalized.  

    One solution to achieve this target is the acquisition of oil and gas fields abroad. This acquisition was carried out through PT Pertamina (Persero) as a State-Owned Enterprise (BUMN) engaged in the oil and gas sector of national oil and gas companies, such as PT Medco Energi Internasional.

"The government will facilitate through bilateral cooperation, starting with G to G (government to government)," he said.

    The acquisition plan was also conveyed at the 1st Meeting of the Joint Committee on Energy between the Ministry of Energy and Mineral Resources and the Moroccan Ministry of Energy, Mines, and Environment.

    

Blogger Agus Purnomo in SKK Migas

    In this event, representatives of Pertamina and the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) were also present so that they could obtain opportunities for cooperation in the oil and gas sector. However, Dwi Anggoro added, that the government's support for the acquisition of this oil and gas block is not limited to Morocco.

"Not only in Morocco but also in other countries," he said.

    Both Pertamina and Medco Energi have also been expanding their upstream oil and gas business overseas. Pertamina has several oil and gas blocks in 12 countries. In Algeria, the company owns shares in the Menzel Lejmat North (MLN), El Merk (EMK), and Ourhoud (OHD) blocks. apart from Algeria. 

    In Iraq, Pertamina holds shares in West Qurna 1 Field. While in Malaysia, Pertamina holds shareholdings in Block K, Block Kikeh, Block SNP, Block SK-309, and Block SK-311.

    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. These overseas oil and gas blocks have contributed to Pertamina's overall production which reached 861 thousand barrels of oil equivalent per day/BOEPD in the first quarter of 2021.

    President Director of PT Pertamina Hulu Energi (PHE) Budiman Parhusip had said, the contribution of the realization of this oil and gas production was 147 thousand BOEPD from international oil and gas fields and 713 thousand BOEPD from domestic. In detail, oil production from foreign assets was recorded at 97 thousand bpd and gas 291 MMScfd.

    Meanwhile, on its official website, Medco owns shares in 10 oil and gas blocks overseas. In detail, Blocks 10 and 12 in Mexico, Area 47 in Libya, Block 9 in Yemen, Karim Field in Oman, Blocks 1 and 4 in Tanzania, Bualuang, and Sinphuhorm Fields in Thailand, and Block 12W (Chim Sao and Dua) ​​in Vietnam.

    Some of Medco's oil and gas blocks are already in production. In the first quarter of 2021, Medco's total oil and gas production, both from within and outside the country, was recorded at 101 thousand BOEPD. Dwi Anggoro continued, based on the status at the end of 2020, Indonesia's oil reserves were recorded at 4.2 billion barrels and 62.4 trillion cubic feet of gas. 

    If there are no new discoveries, the age of this oil reserve is only about 9 years and gas about 18 years. To meet domestic demand which reaches 1.5 million bpd, Indonesia is forced to import oil because domestic production is only around 745 thousand bpd.

    However, he said the government would not only rely on additional production from abroad. Although oil production continues to decline, the government will continue to focus on achieving the production target of 1 million bpd with various efforts, including enhanced oil recovery (EOR), increasing exploration activities, utilizing new technology, as well as simplification and flexibility of the procurement process.

Infrastructure development

    In addition to increasing oil and gas production, the government also continues to build oil and gas infrastructure to strengthen national energy security. The government will increase the capacity of fuel oil refineries and build natural gas infrastructure.

“The government encourages the development of national oil and gas infrastructure, both LNG, gas, and refineries. Therefore, we are very open to collaborating with any partner countries in investing in the oil and gas sub-sector,” he said when giving a presentation at the 1st Meeting of the Joint Committee on Energy between the Ministry of Energy and Mineral Resources and the Moroccan Ministry of Energy, Mining and Environment.

    Regarding the development of natural gas infrastructure, Indonesia has prepared a national natural gas master plan, including building PLTMG, gas pipeline infrastructure, and natural gas networks for households. Especially for the gas network, by 2020 696,011 house gas connections (SR) have been built.

"The government targets that by 2024, the number of gas networks built will reach 4 million SR," added Dwi Anggoro.

Investor Daily, Page-10, Tuesday, June 29, 2021.

Chevron Workers Immediately Change Status to Pertamina Officers

 

    Ahead of the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) to Pertamina Hulu Rokan (PHR) on August 9, 2021, Pertamina welcomes CPI workers who will change status to Pertamina employees or commonly called Pertamina Officers.

PT Chevron Pacific Indonesia (CPI)

"I welcome the 2,757 employees of Chevron Pacific Indonesia, prospective Pertamina Group employees," said PT Pertamina (Persero) President Director Nicke Widyawati in an online discussion in the form of a Townhall Meeting with all CPI employees.

“The proverb says 'You don't know it, you don't love it, for that today there was a brief introduction from Pertamina regarding Corporate Overview, Subholding Upstream Overview, PHR Overview, and Human Capital Aspects so that fellow workers who will become the Pertamina Group's extended family will get to know Pertamina closer,” said Nicke Widyawati.

Nicke Widyawati

    According to Nicke, the transfer of management to Pertamina as a national company will provide wider benefits for the state both in terms of management and management state revenue and strengthen Pertamina's position as one of the locomotives of development and the national economy.

"We also have a mandate and a noble task where we have a target to be able to produce 1 million barrels of oil and gas by 2030, for that we need commitment and dedication from all elements of workers, especially the Upstream Subholding to be able to realize this goal," concluded Nicke.

    President Director of PT Pertamina Hulu Energi as Upstream Subholding Budiman Parhusip explained that later the Rokan Block will be managed by PHR under the auspices of PT Pertamina Hulu Energi as Upstream Subholding. Currently, PHR manages Upstream Work Areas and Assets in the Sumatra Region, known as Regional 1 - Sumatra Subholding Upstream.

"With this Regionalization system, between Work Areas and Assets that are close to each other, especially Sumatra in this case, field optimization and operational development effectiveness can be carried out. So that the joining of CPI Workers will also open up more career development opportunities,” explained Budiman.

    PHR President Director Jaffee Arizon Suardin added an explanation regarding PHR, which is also Regional 1 – Sumatra in Pertamina's Upstream Subholding that PHR manages the Rokan block and manages all Pertamina blocks or work areas in Sumatra.

“The focus is that we want to grow significantly and sustainably by focusing on all the potentials that can still be developed. Business Continuity to maintain and even increase production as well as safety and reliability remain the main priority in carrying out the work. Pertamina through PHR will also ensure that the operatorship transfer runs smoothly so that we can complete the program in 2021 and grow significantly in the following years," said Jaffee.

    Regarding Human Resources, Oto Gurnita, Director of Human Resources & Business Support for Upstream Subholding, explained the basic principles of managing workers towards management transfer, especially those related to the organization, employee development transfer, and employee development, and other industrial relations related matters. 

    Managing Director of Chevron IndoAsia Business Unit and President Director of PT Chevron Pacific Indonesia (CPI) Albert Simanjuntak said that this opportunity for open discussion is a positive step for both parties.

"Through this event, we hope that CPI workers can gain a comprehensive insight into PT Pertamina (Persero), Subholding Upstream, and also specifically PT Pertamina Hulu Rokan (PHR). Human Resources is the most important asset in any company and PT Chevron Pacific Indonesia (CPI) is no exception. Integrity, professionalism, and dedication are values ​​that are proven to bring success to us. Hard work and these values ​​will continue to bring success to workers wherever they are. For that, he hopes that PT Chevron Pacific Indonesia (CPI) workers who will join PHR can make their best contribution, even during this COVID-19 pandemic, with the hope that the production of the Rokan block will achieve maximum results," said Albert.

Investor Daily, Page-10, Monday, June 7, 2021

Pertamina Encouraged to Accelerate the Realization of Upstream Oil and Gas Investment

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) encourages Pertamina Group to accelerate the approval of upstream oil and gas investment. This acceleration is needed to meet the national oil lifting target this year, which was set at 705 thousand barrels per day (BPD).

Blogger Agus Purnomo in SKK Migas

    Head of SKK Migas Dwi Soetjipto said the realization of oil production by the end of March was recorded at 679.5 thousand BPD, so there is still a gap of 25.5 thousand BPD with a target of 705 thousand BPD. 

    This difference is due to the fact that the work programs of several cooperation contract contractors (KKKS) have not been realized, some of which are in the KKKS under the Pertamina Group. According to him, the difference in production from the Pertamina Group KKKS is around 10 thousand BPD.

"We are working hard to accelerate the work plan, especially in the second and third quarters. There is already a commitment from KKKS, including Pertamina, to accelerate implementation from the fourth quarter to the third quarter, so that it doesn't accumulate at the end of the year and the impact on production can be felt more quickly, "said Dwi.

    He said, the existence of organizational changes within the Pertamina Group through the formation of Upstream Subholding, had an impact on the implementation of the KKKS upstream work plan under the Pertamina Group. Primarily, related to the Final Investment Decision (FID) approval for the upstream work program.

    His party has discussed the delay in implementing this work plan with the management of PT Pertamina (Persero) as the Oil and Gas Holding and PT Pertamina Hulu Energi (PHE) as the Upstream Subholding. Pertamina has committed to be able to immediately provide investment approval and immediately resolve problems related to organizational changes.

"It has been said that starting this month there should be no more issues waiting for FID and this has been implemented. Pertamina has raised the investment limit that the subsidiary can make, ”said Dwi.

    This change will make the implementation of activities with a budget that is not too big to be smoother, including for drilling wells. PT Pertamina EP Communication Relations & CID Manager Hari Setyono said that his party remains committed to meeting national energy needs and supporting the achievement of targets set by the government. For this reason, Pertamina EP will increase the number of wells drilling this year to 131 wells.

"This amount represents the largest number of drilling in the history of Pertamina EP's operational activities," he said.

    Referring to SKK Migas data, there are three KKKS under the Pertamina Group whose oil production is still below the APBN target. In detail, as of last March, Pertamina EP oil production was recorded at 73,503 BPD or 86.5% of the target of 85 thousand BPD, PT Pertamina Hulu Energi OSES 24,030 thousand or 89% of the target of 27 thousand BPD, and PT Pertamina Hulu East Kalimantan 8,779 or 83. , 6% of the target of 10,500 BPD.

Pending Drilling

    According to Dwi, delays in the implementation of work programs also occurred in other KKKS, which in turn had an impact on the low realization of oil and gas lifting. In the first quarter of 2021, the realization of development wells still reached 76 wells, or 13% of the target of 616 wells. Then the realization of workover was only 143 wells or 23% of the target of 615 wells and well maintenance only 5,531 activities or 21% of the target of 26,431 activities.

    For exploration activities, 6 wells of the target of 48 wells were still drilled, 2D seismic survey of 1,349 kilometers (km) of the target of 4,569 km, 3D seismic of 263 square kilometers (km2) of the target of 1,549 km2, and G&G study of 62 activities from the target 116 activities.

"The development well is indeed at the beginning of the year for investment permits or FID and the procurement process has become late because it has only started in the current year in the future it will be repaired, "said Dwi.

    Another reason is that the production performance of several fields did not match forecasts, such as an increase in water content in the Banyu Urip and Sukowati Fields. Then there is the issue of facility integrity in the Offshore South East Sumatra (OSES) Block, X-Ray Field, and a leak in the North West Java Offshore Block.

    Finally, unplanned shutdowns at the Tangguh Papua Project, Suban Field, and the Jabung Block. However, he said that the acceleration of the implementation of the Pertamina Group and other KKKS work programs would help in pursuing the lifting target. 

    Moreover, the actual lifting has already exceeded 90%, namely oil lifting of 676.2 thousand barrels per day or 95.9% of the APBN target of 705 thousand BPD and gas of 5,539 million standard cubic feet per day / MMscfd or 98.3% of the target of 5,638 MMscfd.

"We will help with various kinds including FID approval, land acquisition, and environmental permits. We are working hard to be able to accelerate it, "said Dwi.

    The realization of oil and gas investment in the first quarter yesterday was not too high, namely US $ 2.4 billion or 19.4 percent of the target of US $ 12.38 billion.

"Efforts to attract investors will continue," he added.

    SKK Migas is working on a number of additional incentives for KKKS so that national oil and gas production can be higher.

Investor Daily, Page-10, Wednesday, April 28, 2021.

Chevron Delivers Rokan Block Data to the Government

 

    Ahead of the transfer of management, PT Chevron Pacific Indonesia (CPI) as the current operator of the Rokan Block has completed a large number of asset data collection and submitted production, exploration, and operational activity support data to the Government of Indonesia through the Special Task Force for Upstream Oil and Gas Business Activities. (SKK Migas). Chevron has also started sharing this data with PT Pertamina Hulu Rokan (PHR) as the next Rokan Block operator.

PT Chevron Pacific Indonesia (CPI)

"Our company is committed to carrying out the transition process of the Rokan Block in a safe, reliable, and smooth manner so that this block continues to provide optimal benefits for the country and the people of Indonesia. 

    In the future, we hope that the process of transferring the management of the Rokan Block can become one of the points of reference for the transfer of other oil and gas working areas in Indonesia, "said PT CPI's Corporate Communication Manager Sonitha Poernomo.

Sonitha Poernomo

    From August 2020 until now, PT CPI has submitted all data included in the termination checklist to SKK Migas. The data includes those related to geology and geophysics, licensing, standard operating procedures (SOP), production facilities, land, goods and services contracts, human resources, and community development programs. 

Blogger Agus Purnomo in SKK Migas

    Chevron has completed submitting the data ahead of schedule to support a smooth transition process. Chevron also coordinates intensively with SKK Migas and PHR to discuss various technical aspects of the transition process. Chevron is also trying to maintain the Rokan Block oil and gas production.

"Last year we were still able to meet the production target set by the Government," said Sonitha.

    In addition, Chevron has also started an incremental drilling program at the end of December 2020 in accordance with the Heads of Agreement (HoA) with SKK Migas which was signed in September last year.

the Rokan Block

"The HOA is critical to slowing down the rate of decline in natural production before the end of the Rokan Block management transfer period and will continue to meet Indonesia's energy needs," said Sonitha.

    President Director of PT Pertamina Hulu Energi (PHE) Budiman Parhusip is committed to transferring employment to Chevron workers in the Rokan Block with conditions that have been mutually agreed upon with related parties. In addition, his party has also collaborated with several universities in Riau, including for Social and Environmental Responsibility (TJSL) activities.

    The TJSL program will be prioritized to improve the independence of the Riau people in the fields of education, health, economy, and environmental preservation. Planning for the TJSL program also involves local governments.

"As for the Local Business Development (LBD) program which is currently being built and implemented by the CPI, it will first be discussed further.

    Coordination with CPI is needed to obtain 260 LDB contract schemes and data before the socialization is carried out, "said Budiman.

Investor Daily, Page-10, Tuesday,  March 16, 2021

Pertamina-Chevron Intensively Discuss the Rokan Block

 

    PT Pertamina (Persero) continues to strengthen its business strategy by preparing for the transfer of management of the Rokan Block which will start operating PT Pertamina Hulu Rokan (PHR) on August 9, 2021. Pertamina continues to coordinate intensively with PT Chevron Pacific Indonesia (CPI) to discuss the Rokan Block.

PT Chevron Pacific Indonesia (CPI)

"We coordinate intensively with the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) and CPI, especially regarding the transition to nine main areas in order to ensure the continuity of all operations and routine activities after the Rokan Block is operated by PHR," said PHR's Managing Director. RP Yudantoro.

Blogger Agus Purnomo In SKK Migas

    Yudantoro said that the nine main areas of the Rokan Block transition include drilling workover, electricity and steam supply, contracts and SCM, IT and Petrotechnics, data transfer, human capital, SOPs and permits, chemical EOR and the environment, and abandonment and site restoration (ASR). 

the Rokan Block by Chevron

    Yudantoro said Pertamina's upstream sub-holding through PHR had also prepared a long-term program to maintain production and curb the rate of decline in oil. According to him, the Rokan Block is a block that naturally has experienced a decline in production from year to year condition, Yudantoro continued, efforts to contain the rate of decline and increase production are the most crucial things in the Rokan Block. At least, there will be 44 development wells that will be drilled in 2021 after the Rokan Block is transferred to Pertamina.

    Pertamina Hulu Energi (PHE) Corporate Secretary Whisnu Bahriansyah said the readiness to transfer the management of the Rokan Block was not only carried out in the operational aspect but also fostering good relations with stakeholders. The Rokan Block is a production contributor block as much as 24 percent of national production. 

    Currently, the PT Chevron Pacific Indonesia (CPI) operates with an average production of around 165 thousand barrels per day. The Rokan Block has five large fields, namely Duri, Minas, Bangko, Balam South, and Petapahan which are scattered in five districts in Riau Province.

PT Perusahaan Listrik Negara

    The development of the Rokan Block involves a number of State-Owned Enterprises (BUMN). Apart from Pertamina, PT Perusahaan Listrik Negara (Persero) will meet the demand for electricity and steam in the Rokan Block working area. PLN has signed a power and steam power purchase agreement (SPJBTLU) with PHR.

    PLN will optimize the three-year transition period by constructing the Sumatra system interconnection to replace the transitional supply and increase the supply capacity to PHR. In 2024, it is estimated that the Sumatra system's power reserve will be 3,811 megawatts (MW) or 46.1 percent, so it is certain that it is ready to meet the electricity needs of the Rokan Block.

Investor Daily, Page-10, Tuesday, Feb 17, 2021

Pertamina Prepares 9 Main Areas for Transfer of Management of the Rokan Block

 

    PT Pertamina (Persero) continues to strengthen its business strategy by preparing for the transfer of management of the Rokan Block, which Pertamina will start operating through its subsidiary PT Pertamina Hulu Rokan (PHR) on August 9, 2021. For the transition, 9 main areas were prepared to ensure the continuity of all operational activities and routine activities after the block was operated by PHR.

PT Chevron Pacific Indonesia (CPI)

"We coordinate intensively with SKK Migas and PT Chevron Pacific Indonesia (CPI), especially for the transition to 9 main areas in order to ensure the continuity of all operational activities and routine activities after the block is operated by PHR," said the President Director of PT Pertamina Hulu Rokan (PHR). RP Yudantoro.

    The nine main areas of the Rokan transition include Drilling Work Over, Electricity and Steam Supply, Contracts and SCM, IT and Petrotechnical, Data Transfer, Human Capital, SOP and Licensing, Chemical EOR, and Environment and ASR (Abandonment and Site Restoration). 

    Sub holding Upstream Pertamina through PHR has also prepared a long-term program to maintain production and curb the rate of decline in oil. The Rokan Block is a block that has experienced a natural decline in production from year to year. For this reason, efforts to contain the rate of decline and increase production are the most crucial things.

    There will be at least 44 development wells that will be drilled in 2021 after the block is transferred to Pertamina. And another 40 additional development wells are planned, according to discussions with SKK Migas. 

Blogger Agus Purnomo in SKK Migas

    Yudantoro explained that apart from drilling development wells, in the long term other programs have also been prepared in the form of Infill Drilling, exploration well drilling, workover/well intervention, optimization of waterflood and steam flood programs, CEOR, and other programs to increase reserves.

"In accordance with the period of the production sharing contract with the Government, the Rokan Block will be operated until 2041 by PHR. At that time, we had to ensure that the Rokan Block would continue to contribute optimally to national production through the various programs we implemented, "said Yudantoro.

    Whisnu Bahriansyah, Corporate Secretary of Pertamina Hulu Energi (PHE), added that readiness for management transfer is not only carried out in the operational aspect but also in fostering good relations with stakeholders.

"Subholding Upstream Pertamina through PHR also prepares community programs, so that after the transfer of management it is not only the operational side that will run sustainably but also on the social, community and environmental side," concluded Whisnu.

    The Rokan Block is a production contributor block as much as 24% of national production. Currently operated by PT Chevron Pacific Indonesia with an average production of around 165 thousand barrels per day. The Rokan Block has five large fields, namely Duri, Minas, Bangko, Balam South, and Petapahan, which are spread across five districts in Riau Province.

Investor Daily, Page-10, Tuesday, Feb 17, 2021

21 EOR Projects will be Upstream Until 2030

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) plans 21 enhanced oil recovery (EOR) projects to start operating until 2030. EOR is planned to support the achievement of the oil production target of 1 million barrels per day (BPD)  by 2030.

Blogger Agus Purnomo in SKK Migas

Head of SKK Dwi Soetjipto said, if there is no effort, national oil production will continue to decline in the future. In order to achieve the target of 1 million bpd by 2030, a number of strategies have been formulated by his party, namely accelerating the transformation from reserves to production, exploration, and implementation of EOR activities.

Dwi Soetjipto

"A total of 21 EOR projects using polymers, surfactants, and CO2, are planned to start onstream until 2030," he said.

He explained that his party had identified which oil and gas fields this EOR activity would apply. In SKK Migas data, there are 42 oil and gas fields that are candidates for this EOR activity. Unfortunately, the implementing agency for upstream oil and gas activities did not specify which fields would start producing additional production by 2030.

"We have identified which arenas [for EOR], and what the reserves and production are like," said Dwi.

The 42 oil and gas fields are Minas, Melibur, Bangko, Medium Water, Widuri, Bajubang, Kenali Asam, Batang, Tanjung, Bekasap, Guruh, Ramba, Jatibarang, Zelda, Eman, Walio, and Duri Ring fields. Apart from that, there were Krisna, Rantau, Limau PQ, Tanjung Tiga Barat, Zulu, Pedada, Rantau Bais, Jirak, Balam South, Tempino, Farmers, Handil, Gemah, Kaji May, Prosperous, Kulin, Zamrud, and Raja fields.

Referring to SKK Migas data, the EOR project is targeted to start increasing national oil production in 2024 with two projects starting onstream. Furthermore, in 2025 and 2027, two projects each are targeted to start producing. After that, a total of 6 EOR projects are planned to start operating in 2028, 5 projects in 2029, and 4 projects in 2030.

Meanwhile, the rest of the EOR projects are scheduled to start production in 2031-2040. In detail, as many as 8 EOR projects will operate in 2031, 5 projects in 2032, 3 projects each in 2033-2034, 2 projects in 2035, 1 project in 2036, 4 projects in 2037, 1 project in 2038, and finally 4 projects by 2040.

Secretary-General of the Indonesian Petroleum Engineering Experts Association (IATMI) Hadi Ismoyo said, there is indeed the potential for additional oil production from EOR activities. However, not only technical aspects but the government must also pay attention to economic aspects so that additional production can be realized.

"The government must open up and provide extraordinary support, including from the fiscal side," he said.

The Rokan Block Chevron

Rokan Block

Dwi added, one of the large potential additional oil production from EOR is expected to come from the Minas Field, Rokan Block. Referring to SKK Migas data, Minas Field will become the backbone of national oil production with production reaching 52 thousand bpd in 2030.

"We hope that EOR Minas can be executed. We depend on Pertamina and partners to make it happen, "he said.

Hadi added that it should be focused on fields that have the potential to generate large amounts of additional oil production, one of which is the field in the Rokan Block. This is because EOR activities are not necessarily economical if they are applied in small fields.

"In Rokan, the original oil base is 8.5 billion barrels. If we talk about 10% recovery, we will already get 850 million barrels, ”he said.

PT Pertamina Hulu Energi (PHE)

Director of Strategic Planning and Business Development of PT Pertamina Hulu Energi (PHE) John H Simamora said, in the EOR planning by SKK Migas, the Rokan Block was included in it. 

PT Chevron Pacific Indonesia 

    He has entrusted the government and SKK Migas with regard to the EOR project, primarily for the implementation of the EOR test which has been carried out by PT Chevron Pacific Indonesia as the current Rokan Block operator. However, his party is concerned about the economic aspects of the EOR project in the Rokan Block if you see the current oil price developments.

"If the price of oil is still like today, I myself don't think we can run EOR economically," he said.

However, this could be different if the government had other perspectives in implementing this EOR. One of them, if the government will provide incentives to increase the economy of the EOR project.

"But primarily, we want oil prices to improve," said John.

When signing the Rokan Block contract, the implementation of EOR activities was 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 the US $ 88.6 million stage-1 steam flood Kulin or Rantau Bais.

Investor Daily, Page-10, Monday, Nov 23, 2020

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

Pertamina Hulu Mahakam Deposits State Revenue of US $ 406.64 Million

 

PT Pertamina Hulu Mahakam (PHM) recorded a positive oil and gas production performance until the end of September. This subsidiary of PT Pertamina Hulu Energi (PHE) made a deposit state revenue of US $ 406.64 million from the split portion for the government.

PT Pertamina Hulu Energi (PHE)

According to the General Manager of PHM Agus Amperianto, the realization of the profit-sharing was only slightly below the target in the work plan and budget (WP & B) of US $ 416.97 million.

Agus Amperianto

"This is due to low world oil and gas prices due to abundant supply and exacerbated by weak demand due to the pandemic," said Agus in Jakarta.

PHM always strives to be able to contribute very good state revenue even though the Mahakam Block has entered a natural production decline phase. Through various innovations, especially in drilling and well maintenance, his party tries to make cost efficiency (cost efficiency).

"This saving will also reduce costs that must be repaid by the state to contractors or cost recovery," said Agus.

As of September, the cost recovery optimization value has reached the US $ 303.85 million. Agus revealed that his party will try to maintain a positive performance in the Mahakam Block for the remainder of this year even at the time of the Covid-19 pandemic.

the Mahakam Block

"But in the future, what we have to pay attention to and be of common concern is the impact of the decline in world crude oil prices on our demand for oil and gas production," he said.

As is known, the world crude oil price has dropped and once reached the US $ 30 per barrel. This is due to a flood of supply in the market coupled with weak global demand in the aftermath of the pandemic. In this condition, it is hoped that the government can provide incentives.

"In a situation of weak demand plus low world crude oil prices, we hope the government is willing to provide incentives for the upstream oil and gas industry to reduce pressure," said Agus.

From the production side, it was recorded that until the end of September the realization of Mahakam Block gas production reached 606 million standard cubic feet per day / MMScfd or 18.82% exceeding the APBN-P target of 510 MMscfd. Meanwhile, the actual oil production in this block was recorded at 29.6 thousand barrels per day (bpd), or 18.4% higher than the target of 25 thousand bpd.

According to Agus, the high realization was due to additional production from a number of wells that were drilled last year and started production in early 2020. In addition, the oil and gas production achievement is also supported by the application of various innovations in workover and well services.

"So that oil and gas production in the Mahakam Block until the third quarter of 2020 remains good and so far has not been affected by the Covid-19 pandemic," he said.

The realization of operations in the Mahakam Block is also very good. This year, his party is targeting development drilling as many as 79 wells. By the end of September, the realization of development drilling had reached 63 wells. Exploration well drilling has also been carried out according to the target, namely one well in the South Peciko structure. 

    According to Agus, his party is trying to drill as many wells as possible to maximize existing oil and gas reserves. This is because oil and gas reserves and production from wells in the Mahakam Block are increasingly marginal.

"What should be proud of is the ability of engineers at PHM to make various innovations to shorten the duration of drilling and save costs," he added.

Furthermore, until the end of September, PHM succeeded in realizing 3,595 well services from the target of 4,178 jobs. Then, reworking the well was recorded as reaching 59 jobs from the target of 69 jobs. One of the innovations developed by PHM in carrying out this activity is the completion of wells (completion) without using a rig which has succeeded in reducing the overall cost of the well.

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

First, the Restructuring of the Business Is Running Smoothly

PT Pertamina (Persero) ensures that the restructuring process of the company is carried out according to what is customary in the business world. Currently, the restructuring process is still in a transition period to ensure Pertamina and the entire group business are ready for the next process. 

Blogger Agus Purnomo in SKK Migas

    SVP Corporate Communication & Investor Relations of Pertamina Agus Suprijanto said Pertamina restructuring is a mandate for shareholders that must be realized. In the process, management always considers strategic aspects, procedures, and handling of all company assets, including employees, in accordance with applicable legal regulations.

"The company restructuring carried out by Pertamina currently has common practices in efforts to improve company performance and efficiency, as has happened in various other global energy companies. When restructuring, the company also goes through a transition period, "said Agus.

Agus said the legal position or legal standing regarding the formation of a holding and group business is clear. Regarding assets, Agus confirmed that until now there has been no transfer of Pertamina's assets to other group businesses or subsidiaries. 

    The status of the management of the work area of ​​the upstream subsidiary that has contracted with the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) remains the same. Agus said regionalization was carried out to coordinate and ensure that upstream oil and gas operations were integrated so that operations would be more efficient.

Agus denied accusations that Pertamina's restructuring had hampered operations and strategic projects. According to him, so far all business processes and operations from upstream to downstream have been running well.

"This shows that Pertamina's business processes are fine, not messy. In terms of work procedures, management has also issued regulations governing workflow and authority during the transition period, ”said Agus.

Regarding refinery revitalization and construction, Agus said, until now the refinery development master plan and grass-root refinery (RDMP / GRR) projects are still ongoing according to predetermined stages. In general, all projects showed clear progress and went well with management monitoring.

"The restructuring process is carried out in stages. In the current transitional period, we ensure that all restructuring preparations are complete, ”said Agus.

The Ministry of State-Owned Enterprises (BUMN) stated that Pertamina's restructuring was carried out to answer the needs of the oil and gas industry. Special Staff to the Minister of BUMN, Arya Sinulingga, said that the energy sector continues to undergo transformation or change, which demands that Pertamina be able to adjust. There are five sub holdings that have been formed, including the upstream sub-holding whose operations are held by PT Pertamina Hulu Energi (PHE).

Then, there is PT Perusahaan Gas Negara (Persero) Tbk as a gas sub-holding and refinery and petrochemical sub-holding run by PT Kilang Pertamina Internasional. Power and NRE sub-holding (PT Pertamina Power Indonesia) and commercial and trading sub-holding (PT Patra Niaga). The shipping company operation is held by PT Pertamina International Shipping.

Republika, Page-9, Monday, Oct 26, 2020

Environmental Audit Completed, Rokan Block's Fate in the Hands of the Ministry of Energy and Mineral Resources

The fate of the continued development of the Rokan Block is now in the hands of the Ministry of Energy and Mineral Resources (ESDM) after the Environmental audit was completed in August 2020.

the Rokan Block by Chevron

Deputy for Maritime Sovereignty and Energy Coordination at the Coordinating Ministry for Maritime Affairs and Investment Purbaya Yudhi Sadewa said the recommendations given by the Environmental audit team had reached the Coordinating Ministry for Maritime Affairs and Investment.

"It is still in line with the plan so far. There are almost no obstacles," he said

Purbaya said, currently the finalization stage is in the hands of the Ministry of Energy and Mineral Resources, especially to ensure the implementation of the head of agreement (HoA). However, it is a bit difficult to ensure that the HoA can be signed this week. Although he did not specify, he said Chevron's drilling plan for next November had not changed.

Blogger Agus Purnomo in SKK Migas

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) confirmed that the Rokan Block Environmental audit process was completed in August this year. Acting Head of Program and Communication Division of SKK Migas Susana Kurniasih said PT Chevron Pacific Indonesia (CPI) is considered to carry out management in accordance with environmental management laws and regulations.

"The results of the audit have been reported to the Coordinating Minister for Marves and then SKK Migas and Chevron will sign ahead of the agreement for the management of the Rokan Block during the transition period," said Susana.

The HoA that will be signed includes a commitment to drilling activities in November 2020 and drilling in 2021. Not only that, but HoA will also include the post-mining recovery fund reserve, whose activities will be carried out by Pertamina Hulu Rokan (PHR). Susana ensured that this would not interfere with PHR's operating costs.

"The finalization process is being carried out, all parties hope it will be completed this September," said Susana.

Kontan, Page-13, Monday, Sept 7, 2020

ENI has the potential to replace Chevron in working on the IDD project

 

The Ministry of Energy and Mineral Resources (ESDM) said Chevron Indonesia would withdraw from the Indonesia Deepwater Development (IDD) Project. The oil and gas company from the United States is offering management rights to ENI.

the Indonesia Deepwater Development (IDD) By Chevron

The Acting Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Ego Syahrial, said that Chevron is interested in working on the IDD project because it is still managing the Rokan Block. Once the management rights were transferred after the production sharing contract / PSC for the Rokan Block ended, Chevron also intended to withdraw from the IDD project.

"Chevron is an IDD package with Rokan. If Chevron leaves the Rokan block, that means Chevron is also out of the IDD project, ”he said.

Chevron is currently still looking for a replacement who will work on the IDD project. One of the candidates being offered by Chevron is an Italian oil and gas company, ENI.

"Now offered by ENI, I think so. The point is they are offering themselves to each other, which I know Chevron is offering. We'll just wait, "explained Ego.

Regarding Eni, the oil and gas company recently signed a contract with the government for the West Ganal Block. This block was previously part of the Makassar Strait Block, which contains the West Seno Field which has been developed by Chevron. Eni also manages the Muara Bakau and East Sepinggan Blocks which are located near the IDD Project.

the Muara Bakau and East Sepinggan Blocks

Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said that his party is still waiting for a report from Chevron regarding the follow-up of the IDD Project. His party has even been chasing the oil and gas company from the United States to immediately make a decision whether to continue this project or not.

Dwi Soetjipto

"The letter from SKK Migas has not been replied to. We are still discussing it. We'll just wait, "he said.

In the IDD Project, Chevron is the operator and majority shareholder of 63%. Chevron is working on this deep-sea oil and gas project with other joint venture partners, namely Eni, Tip Top, PT Pertamina Hulu Energi (PHE), and partners in Muara Bakau. 

SKK MIGAS

      Referring to SKK Migas data, until last June, the IDD Project was still in the process of evaluating the approval of the plan of development / POD revision. In addition, this project is still in the process of evaluating the proposed extension of the Rapak and Ganal Block PSCs.

The IDD project combines two oil and gas fields, namely Gendalo Field, Ganal Block, and Gehem, Rapak Block. Still based on SKK Migas data, this project is targeted to reach a peak gas production of 844 million cubic feet per day (million standard cubic feet per day / MMscfd) and 27 thousand barrels of oil per day (bpd).

     The US $ 6.98 billion projects are planned to start operating in the fourth quarter of 2025. If Chevron releases the IDD project, there will be no more oil and gas projects in Indonesia that the oil and gas company will undertake. 

        The reason is, the management of the Rokan Block has been decided to be transferred to PT Pertamina (Persero) starting in 2021. However, Ego said, this does not mean Chevron will leave Indonesia.

"We don't know, later in the middle, there could be a project," he said.

PT Chevron Pacific Indonesia (CPI)

PT Chevron Pacific Indonesia (CPI) Corporate Communication Manager Sonitha Poernomo said, although the Kutei Basin is an attractive hydrocarbon area, the IDD Project cannot compete for capital in Chevron's global portfolio.

Sonitha Poernomo

Chevron Rapak Ltd (CRL) opened a data room to facilitate discussions on identifying potential partners for the project earlier this year. According to company policy, it was unable to provide detailed information on commercial negotiations. However, his party will continue to work with SKK Migas and potential partners to help realize the potential development of the IDD Project.

"We believe this project will have value for other operators and the Kutei Basin can continue to be developed safely," said Sonitha Poernomo.

 Investor Daily, Page-10, Friday, August 7, 2020