Pertamina will Release PHE to the Stock Exchange

PT Pertamina (Persero) states that one of the sub holdings prepared to be offered to the public is upstream sub-holding which is operated by PT Pertamina Hulu Energi (PHE). This strategy is to increase the company's oil and gas production to be better.

PT Pertamina Hulu Energi (PHE)

Pertamina President Director Nicke Widyawati said, in managing oil and gas blocks, the company usually also partners with other companies. The reason is, by working with other companies, oil and gas production can be more optimal. 

Nicke Widyawati

   In fact, to work on the Rokan Block, the government requires Pertamina to partner with other companies. This is also the basis for the company to prepare upstream sub-holding for the IPO.

"The first thing we will see [for IPO] is upstream sub-holding," said Nicke Widyawati.

Nicke Widyawati explained, many of the company's upstream assets still have the potential to be developed. However, the development of oil and gas blocks requires huge funding. In the future, around 60% of the company's total budget will be used to fund the upstream oil and gas project.

"So, later the funds obtained from the IPO will be used for upstream investment," Nicke said.

Upstream oil and gas investment, called Nicke Widyawati, is not limited to the upstream oil and gas assets owned by the company. Funds from the IPO will also be used to add new upstream oil and gas assets.

"Our IPO will use the funds for the upstream acquisition," said Nicke Widyawati.

At the end of last year, the company had budgeted funds for the acquisition of oil and gas blocks of US $ 150 million this year. Although it is not yet certain which block is targeted, the company is eyeing assets in Africa and the Middle East.

Energy observers from Trisakti University Pri Agung Rakhmanto rate, the IPO step is very good to improve corporate governance, because it must be more open. IPO is also good to be able to raise funds from third parties (public).

"For Pertamina's upstream, which does require strengthening funds for investment, this is positive. When it comes to performance, that's another thing, it also depends on how to run the company, "he said.

Regarding Article 33 of the 1945 Constitution which states that production branches which are important for the State and which control the lives of many people are controlled by the State, according to him, it does not become an issue if the IPO does not relinquish the majority of share ownership.

"As long as the majority shares are still in the country, in my opinion, more positive," said Pri Agung.

He added Pertamina was not the first oil and gas BUMN to be listed on the exchange. At present, there are already many other state-owned oil and gas companies listed on the stock exchange, such as Petrobras which is a Brazilian oil and gas BUMN, Petronas Malaysia, YPF Argentina, Statoil Norway, and Saudi Aramco Saudi Arabia.

Management of Oil and Gas Blocks

In addition to the IPO plan, Pertamina is also restructuring its oil and gas block management. Nicke explained, after the sub-holding was formed, the management of the oil and gas block would be done by region. Previously, despite being in one area, the management of the oil and gas block was carried out by a different subsidiary. For example in Sumatra, there are oil and gas blocks managed by PHE and PT Pertamina EP.

"We think this should be managed in synergy and coordination, so there can be efficiency. For this reason, under the sub-holding [oil and gas block] is managed in a way regionalization, "explained Nicke Widyawati.

In this way, all resources and equipment procurement can be synergized. All this time due to being separate, procurement of tools such as rigs has become difficult and long. This is because among subsidiaries scrambling to find rigs, while the number of rigs in the market is limited. 

    Other parties are also reluctant to increase the number of rigs because the company's procurement contracts tend to be short-term. These problems have become one of the causes of exploration and achievement of upstream oil and gas production below the target.

"This is how we manage all assets more efficiently and at the same time, improve our products and services," said Nicke.

It also wants to encourage investment in rig procurement in the country. Under the upstream sub-holding, there are several subsidiaries that will work on Pertamina's oil and gas blocks in certain areas. 

    Precisely, Pertamina EP will manage the company's oil and gas block in Java, PT Pertamina Hulu Indonesia will work on upstream oil and gas assets in Kalimantan, Pertamina EP Cepu (PEPC) will handle oil and gas working areas in Eastern Indonesia, and PT Pertamina International EP continues to manage oil and gas blocks outside the country.

Dwi Seotjipto

Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Seotjipto said, his party would see Pertamina's explanation of organizational changes in upstream sub-holding, mainly related to the authority of each operator in Pertamina's oil and gas block. The reason is that the Production Sharing Contract / PSC signed by the government is the company that is the operator.

Blogger Agus Purnomo in SKK Migas

"With the sub-holding, we will later see its authority in investment as well as the implementation and operation of the oil and gas block concerned," Dwi Seotjipto said.

Regarding the implementation of the contract, this depends on the bureaucracy established by Pertamina in the presence of this sub-holding. If the bureaucracy and decision-making are simpler, and the authority of the oil and gas block operator can be supported, there will be no problems.

"Hopefully it is better, the important thing is that the bureaucracy is not long, so the investment step is faster," Dwi said.

Investor Daily,  Page-10, Tuesday, June 16, 2020

Upstream Oil and Gas Preparing to Go

Upstream oil and gas industry players are gearing up to spur operational performance when the new normal order is implemented. 

Dwi Soetjipto

    The Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said that with world oil prices that have passed the level of US $ 40 per barrel became a positive sentiment for investment in upstream oil and gas activities in the country.

"With the improving oil price, investment in upstream oil and gas will also improve," he said.

Dwi added, his party would review upstream oil and gas activities to be more optimal.

"Next, we will wait for how to optimize activities in Hulu Migas in the new-normal era," he said.

Meanwhile, SKK Migas Deputy for Operations Julius Wiratno said that with the implementation of the new normal period it is expected that upstream oil and gas operational activities would be more productive.

"Because the mobilization of people and goods is not disrupted," he said.

SKK Migas has sent a circular to the Cooperation Contract Contractor (KKKS) related to the preparation and implementation of new normal operations. He revealed the preparation and implementation of new normal operations while adhering to existing health protocols and applicable in the area of ​​oil and gas operations. 

     There are no specific directives, which are important according to the existing protocol. "We're trying if we can quarantine before crew change for one week instead of 2 weeks," he explained.

Sonitha Poernomo

Chevron Pacific lndonesia Corporate Communication Manager Sonitha Poernomo said that the company continues to monitor the current Covid-19 pandemic situation. She said it had used guidelines from international and domestic health authorities.

"Our main concern is employee health and safety and we take precautions to reduce the risk of exposure by ensuring safeguards are available and functioning properly," She said.

Similarly, PT Medco Energi International Tbk. ensuring the sustainability of the company's operations during the Covid-19 pandemic. 

Hilmi Panigoro

     President Director of Medco Energi Hilmi Panigoro said that the company is committed to safeguarding the safety of workers in the work area and maintaining business continuity by complying with the Covid-19 health and safety protocols regulated by the government.

He said that his party was facing a period full of challenges. The rapid decline in energy demand in the face of increasing oil production is a challenge for the industry.

"However, Medco Energi is optimistic that it will succeed in facing challenges caused by the Covid-19 pandemic," he said.

Previously, Medco targeted the company's oil and gas production this year to reach 110,000 barrels of oil equivalent per day. In another development, PT Pertamina Hulu Energi said it would recalculate the economic value of the project in line with the upward trend in oil price movements.

Director of Pertamina Hulu Energi (PHE) Meidawati said that all projects undertaken would recalculate their economic value. The calculation was carried out on several exploration and development drilling projects that can maintain and increase the company's oil and gas reserves and production.

Bisnis Indonesia, Page-4, Thursday, June 11, 2020.

11 Agreement on Changes in Gas Prices Signed

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated 11 letters of agreement (LoA) to adjust industrial gas prices and electricity to the US $ 6 per million British thermal units / MMBTU re-signed.

SKK Migas recorded total gas volume according to the LoA of 231.18 billion British thermal units per day / BBTUD. Thus, the total volume of gas sold at US $ 6 per MMBTU according to government policy has now reached 564.63 BBTUD or 47.53% of the total volume of 1,188 BBTUD in the Minister of Energy and Mineral Resources Decree No. 89K / 2020 concerning Procedures for User Determination and Natural Gas Prices Certain in the Field of Industry.

The LoA was signed by six national gas producers, namely PT Pertamina EP, Kangean Energy Indonesia Ltd., PT Pertamina Hulu Energi (PHE) Jambi Merang, PT PHE Ogan Komering, PT PHE North Sumatra Offshore (NSO), and PT PHE West Madura Offshore (WMO) and partners.

Blogger Agus Purnomo in PHE-WMO

While buyers who signed this agreement were PT Pertamina Gas (Pertagas), PT Sumber Petrindo Perksana, PT Petrokimia Gresik, PT Bayu Buana Gemilang, PT Inti Alasindo Dwiguna, and PT PGN Tbk, PT Pertagas Niaga. Not only LoA, nine oil and gas producers have also signed a Side Letter of Production Sharing Contract (PSC). 

   These nine companies are PT Pertamina EP, PT PHE NSO, PT PHE Ogan Komering, PT PHE Jambi Merang, PT PHE Offshore South East Sumatra (OSES), EMP Bentu Limited, Kangean Energy Indonesia Ltd., PT Pertamina Hulu Mahakam, and Minarak Brantas Gas Inc.

"This signing was carried out in order to provide legal certainty and investment related to the adjustment of gas prices after the issuance of a number of regulations from the Ministry of Energy and Mineral Resources," Head of SKK Migas Dwi Soetjipto.

The Side Letter of PSC explains the profit-sharing adjustment between SKK Migas and oil and gas producers by using a provisional entitlement to the application of natural gas prices determined by the Minister of Energy and Mineral Resources. This calculation is carried out through a mechanism to reduce the share of the country on a monthly basis to maintain the revenue share of oil and gas companies.

Whereas the LoA is a continuation of a previously signed agreement between the seller and buyer of natural gas. The essence of the agreement stipulated in the LoA includes volume, initial gas price, gas price adjustment, and implementation period.

"By signing this side letter of PSC and LoA, we hope that oil and gas producers can continue to increase their investment in Indonesia and maintain the national gas production target," Dwi said.

Chalid Said Salim

PT Pertamina EP President Director Chalid Said Salim appreciated SKK Migas for providing investment certainty in the upstream oil and gas sector through the signing of the Side Letter of PSC and LoA.

"We certainly appreciate this step because it will encourage increased investment in upstream oil and gas in the future. In the short term, Pertamina EP and SKK Migas will optimize the program this year so that it is efficient as the capital stepped up in the following year, "Chalid said.  

 Investor Daily, Page-10, Friday, June 5, 2020

The Jambi Merang PHE 2D Seismic Survey Is Targeted To Be Completed Mid-July

2D seismic sea survey in open areas carried out by Jambi Merang Cooperation Contract (KKKS) of Pertamina Merang since November 2019 has reached 76.4% or around 22,943 Km.

"We are grateful to the Government for giving us the trust to carry out this work mandate, although full of challenges we are optimistic that survey work will be completed by mid-July 2020," said Pertamina Upstream Director Dharmawan H Samsu while carrying out the Management Walkthrough (MWT) virtual with the Head of the Special Task Force for Upstream Oil and Gas Activities (SKK Migas) on the ELSA Regent Ship which is currently in eastern Indonesian waters on Tuesday (26/5).

This 2D seismic survey is one part of the Jambi Merang PHE KKKS Definite Work Commitment which was carried out until 2024 with an investment of US $ 239.3 million. This 2D seismic survey area consists of 47 basins stretching from Bangka waters in western Indonesia to Papua waters in eastern Indonesia.

The length of the track is around 30,000 Km which is the largest seismic survey activity in the Asia Pacific and Australia in the last 10 years. SKK Migas Head Dwi Soetjipto said this 2D seismic survey was carried out 100% by Indonesia's best sons and daughters using the latest technology with parameters designed to accommodate the deepest exploration targets in the history of seismic surveys in Indonesia.

"The quality of results and accuracy in completing work will be important for this survey, which is expected to be able to create new work areas that can improve the upstream oil and gas exploration or investment climate in Indonesia going forward," he said.

Dwi is optimistic that the results of this survey will provide a giant discovery for Indonesia, which will make the Indonesian oil and gas industry enter the second golden era that can produce 1 million barrels of oil per day in 2030.

"SKK Migas gives the highest appreciation to Pertamina and Elnusa as the implementers of seismic work who continue to be committed to carrying out the work even though in the condition of the Covid-19 pandemic, we will be there and always support the efforts of all parties involved," he said.

Investor Daily, Page-9, Saturday, May 30, 2020

First Quarter, Pertamina Oil and Gas Production Increases Slightly

PT Pertamina (Persero) recorded oil and gas production until the first quarter of this year of 919 thousand barrels of oil equivalent per day (barrel oil equivalent per day / boepd), up slightly compared to the realization of the same period last year of 901 thousand boepd. This year, Pertamina targets oil and gas production of 923 thousand boepd.

Pertamina Upstream Director Dharmawan Samsu said oil and gas production in the first quarter of 2020 was recorded at 919 thousand boepd, an increase of 2% compared to last year's average production. Specifically, oil production averaged 421 thousand Barrels Per Day (BPD), while gas production averaged 2,887 million standard cubic feet per day / mmscfd.

"By adjusting work systems and personnel to anticipate the Covid-19 pandemic, Pertamina is still working to keep oil and gas production in line with the targets in the RKAP (work plan and company budget). Until now, it has reached 99% of the target, "he said.

Dharmawan added, the positive performance of the company's oil and gas fields abroad. Pertamina's subsidiary, PT Pertamina International EP (PIEP) managed to contribute oil and gas production by 156 thousand boepd or 103% of the target for the first three months of 2020.

"The increase in production is mainly from field performance in Algeria," he added.

This year, Pertamina set oil and gas production targets of 923 thousand boepd which consisted of oil production of 430 thousand BPD and 2,857 gas mmscfd. When compared with this year's target, the company's oil production realization of 421 thousand BPD was only 97.9 percent of the target. While Pertamina's gas production is around 1% above the target. Dharmawan admitted that the 923 thousand boepd target was very challenging. To ensure oil and gas production targets can be achieved, he will ensure the drilling plan is carried out according to schedule.

"The production target of 923 thousand boepd is very heavy, because we have to make sure that drilling cannot be late," he said.

Pertamina's oil and gas production this year is planned to be obtained from the contribution of oil and gas production from Pertamina's upstream operations in the country amounting to 765 thousand boepd and 158 thousand boepd abroad. From foreign assets, oil production is targeted to increase slightly from 105 thousand BPD to 107 thousand BPD, and gas production will increase from 276 mmscfd to 298 mmscfd. While from the domestic oil and gas block, oil production is targeted at 323 thousand BPD 2,559 mmscfd gas.

For information, the company's oil and gas block assets in the country are managed through its subsidiaries, PT Pertamina Hulu Energi (PHE), PT Pertamina Hulu Indonesia (PHI), PT Pertamina EP, and PT Pertamina EP Cepu (PEPC). PHE targets oil production of 84 thousand BPD and 822 mmscfd of gas. While Pertamina EP set a target of oil production of 85 thousand BPD and 965 mmscfd of gas.

PT Pertamina EP Cepu (PEPC)

PHE plans a number of activities to achieve this year's target, namely drilling 51 development wells and 6 exploration wells, as well 50 wells. While Pertamina EP will drill 108 development wells and 10 exploration wells in 2020.

Anticipate a Global Situation

To anticipate the impact of the decline in world crude oil prices coupled with the Covid-19 pandemic, Dharmawan said, Pertamina take anticipatory steps by implementing a business continuity plan while continuing to conduct in-depth evaluations for prioritizing work plans, operating costs, and investments. This is in line with corporate policies to optimize financing.

"Pertamina continues to maintain the upstream investment level to meet national oil and gas needs, both in production and lifting, but with some adjustments based on priority scale so that the economics of the project can also be achieved," Dharmawan explained.

Pertamina also continues to monitor the development of the global situation, mainly the world price of crude oil, the rupiah exchange rate against the dollar, and the impact of the Covid-19 pandemic. Referring to Pertamina's data, of the total investment budget of the company this year of US $ 7.8 billion, most of it is allocated for upstream oil and gas investment amounting to US $ 3.7 billion. This upstream investment budget is up compared to last year.

ENI Block

Previously, Dharmawan revealed, the increase in upstream investment was partly because the development of the Merakes Field, East Sepinggan Block will begin in 2020. In this block, for information, Pertamina through PHE has a participating interest / PI of 15%. While the operator of this block is ENI. ENI was approved by the plan of development / POD in April last year.

Under the POD, ENI plans to drill six subsea wells and build an underwater pipeline system that will be connected to the floating production facility / FPU Jangkrik block in Muara Bakau Block. Referring to SKK Migas data, the Merakes Field is targeted to start operating in 2021. The peak of field production is estimated to reach 60,305 boepd.

Investor Daily, Page-9, Wednesday, April 8, 2020

PHE is Ready to Boost YYA-1 Well

Pertamina Hulu Energi (PHE) plans to reuse the relief well of the North West Java (ONWJ) Offshore Block used to cover gas leaks in the Karawang Sea in the middle of last year. PHE's Managing Director, Meidawati said, the process of reuse is still ongoing if it goes well, then the impact on new products will be felt starting next year.

"The re-development of YYA-1 production is planned for 2021," Meidawati said.

Meidawati explained, her party was still continuing to study the estimated production at the well. Based on preliminary calculations, production is estimated to be in the range of 1,000 to 1,500 Barrels Per Day (BPD). 

     Previously Director of Operations at Pertamina Hulu Energi (PHE) Taufik Aditiyawarman said that the drilling was planned for three wells. So far they have conducted a number of studies such as studies of subsurface, drilling and platform cutting. The estimated investment for the plan to recover the well is around the US $ 30 million to the US $ 40 million.

"I don't know for sure, recovery, fixing, installing again, maybe the US $ 30 million-USS 40 million," said Taufik.

Director of Engineering and Environment of the Directorate General of Oil and Gas of the Ministry of Energy and Mineral Resources Adhi Wibowo revealed that the results of the gas leak investigation will be announced in the near future. Until now there is no clarity about the YYA-1 gas leak that caused oil spills and impacted on a number of areas.

"Soon it will be finished, not exceeding this month. It is being finalized," Adhi said.

The investigation effort is indeed in conjunction with the plan to re-use the YYA-1 Well. This is according to the development plan proposed by PHE. The investigation involved a number of experts, both from the Ministry of Energy and Mineral Resources and an independent team. Adhi said that after the investigation, the report would be directly conveyed to the Minister of Energy and Mineral Resources Arifin Tasrif.

For your information, this oil and gas well leak occurred on July 12, 2019, around 01:30 West Indonesia Time at the time of re-entry at the YYA-1 well in the re-perforation activity. Then a gas bubble emerged at the YYA Pavilion from the Ensco-67 rig located in the ONWJ offshore operational area. The YYA-1 well is a former YYA-4 exploration well that was drilled in 2011. This well is the leak.

Kontan, Page-14, Thursday, March 12, 2020

Pertamina Hulu Energi Booked US $ 590 Million in Profit

PT Pertamina Hulu Energi (PHE) managed to book a profit of US $ 590 million last year, up 23.68% from the realization of 2018 of US $ 477 million. The increase in profits was supported by the high realization of the company's oil and gas production.

PT Pertamina Hulu Energi (PHE)

PHE's President Director Meidawati said last year's profit realization of US $ 590 million was higher than the 2018 achievement of US $ 477 million. While revenue realization was US $ 2.67 billion, up by 5.81% from the realization in 2018 of US $ 2.53 billion. The increase in financial performance was when the price of oil dropped from US $ 68 per barrel in 2018 to US $ 62 per barrel in 2019.

The company's profit could be higher if last year's oil price reached US $ 68 per barrel. Last year, the company's oil production reached 78,002 barrels per day (BPD). This realization increased by 13.05% from 2018 production achievements of 68,996 bpd. The company's gas production realization also increased slightly from 794 million standard cubic feet per day / mmscfd in 2018 to 803 mmscfd in 2019.

According to him, the achievement of this production performance was due to an increase in oil and gas production from the Jambi Merang and Tomori Blocks. In addition, additional production oil and gas also comes from optimizing planned shutdowns on the Offshore North West Java Block (ONWJ), West Madura Offshore (WMO), and Offshore South East Sumatra (OSES).

"In addition, this production achievement is also due to the success of PHE in reducing production decline from an average of 35% to 20%," Meidawati said.

Blogger Agus Purnomo in PT. PHE West Madura Offshore (WMO)

Meidawati added that ONWJ Block oil and gas production was recorded to increase despite an oil spill from one of its fields, the YY Project. This is because the acquisition of oil and gas production from reworking wells in other fields is very good so that it can cover the lost production from Project YY.

 "Because we work a lot on the ONWJ Block too. So the incidence of oil spills is not very influential. We got a lot of oil and gas production coming in, gas sales also went up, "Meidawati said.

This year, Meidawati hopes that some of the subsidiaries that were the mainstay in the past year will still be able to contribute maximally. This is because his party has set a higher oil and gas production target this year, namely 84 thousand bpd of oil and 822 mmscfd of gas. To pursue the target, he plans to do more massive activities.

"We will carry out drilling for the development of 51 wells and exploration of 6 wells, as well as the reworking of 50 wells," he said.

One of them, he plans to drill two exploration wells in the Nunukan Block. Because, according to the approved plan of development / POD, this block must start producing oil and gas next year.

"If there is no oil and gas flowing, we must return it to the government. Even though we have the privilege to have management rights, "Meidawati said.

Investor Daily, Page-9, Friday, March 6, 2020

Acquisition of the Southeast Jambi Block US $ 135,000

PT Pertamina (Persero) intends to increase cooperation with the Cooperation Contract Contractors (KKKS) to pursue a production target of 923,000 barrels of oil equivalent per day (boepd) this year. Pertamina hopes that the increase in production is in line with profit growth.

The latest asset included in Pertamina's portfolio is the South East Jambi Work Area (WK). PT PHE Southeast Jambi took over 27% of its participatory rights from the hands of Repsol Exploration South East Jambi B.V. The signing of the collaboration took place last Sunday.

Repsol

PHE Southeast Jambi is a subsidiary of PT Pertamina Hulu Energi (PHE) or Pertamina's grandson.

"In the future, we hope to add reserve findings to develop and increase production," said Meidawati, Director of PT Pertamina Hulu Energi (PHE).

PT Pertamina Hulu Energi (PHE)

Looking at the 2018 annual report, PHE has proven oil reserves of 60.28 million barrels of oil (MBO), gas 341.25 billion standard cubic feet (BSCF) and oil and gas 119.16 million barrels of oil equivalent (mboe). Proven oil and oil and gas reserves are down compared to 2017. Only proven gas reserves are rising.

Block SK-305 Malaysia

PHE production relies on 51 Work Areas or blocks. A total of 49 blocks in the country. Then two other blocks abroad, namely Blocks 10 and 11.1 in Vietnam and Block SK-305 in Malaysia. 

     As a result, Southeast Jambi will add to the list of PHE working areas. So far the PHE management has not revealed detailed work plans for Southeast Jambi. But certainly, the acquisition of the block almost requires a special budget.

"Pertamina only replaced the signature bonus proportionally, that is, changing obligations and delivering a performance bond according to the size of the participation," Meidawati said.

The signature value of the Southeast Jambi Block bonus that is part of the PHE is the US $ 135,000. When referring to the Bank Indonesia middle rate (IDX) of Rp. 14,413, the value is around Rp. 1.95 billion. 

MOECO Southeast Jambi B.V.

    Just information, in 2018 the Consortium of Repsol Exploration South East Jambi B.V. and MOECO Southeast Jambi B.V. signed the Southeast Jambi Block Contract. 

The block's exact commitment consists of G and G, 2D seismic along 300 km with a total of US $ 4.65 million. While the signature bonus value is the US $ 500,000.

Kontan, Page-14, Tuesday, March 3, 2020

Pertamina Accelerates BPD 1 Million Oil Production Target by 2026

PT Pertamina (Persero) seeks to accelerate the increase in national oil production to 1 million Barrels Per Day (BPD) in 2026, from the initial plan of 2030.

This is to anticipate the increase in demand for crude oil after the completion of six refinery projects in 2026. 

Nicke Widyawati

    Pertamina's Director Nicke Widyawati said the Special Task Force for Upstream Oil and Gas Business Activities (SKK oil and gas) is targeting an increase in oil production to 1 million BPD. in 2030.

To achieve this target, his party will increase the number of drilling wells, conduct seismic activities to find new reserves, and applying enhanced oil recovery (EOR) technology. However, his party is now preparing an optimistic scenario of this plan, so that oil production of 1 million BPD can be realized in 2026.

"We are making an optimistic case with the EOR [1 million BPD production] in 2026. We hope," he said in a meeting with Commission VI Indonesian Parliament.

Nicke explained, the accelerated increase in oil production needs to be done because the company's oil needs will surge in 2026. This follows the targeted completion of six of the company's refinery projects that year which will boost refinery capacity from the current 1 million BPD to 2 million BPD.

"Why is it accelerated in 2026? Because the refineries we built are starting to produce, and that needs an additional supply of crude oil, " Nicke said.

Regarding EOR, according to her, Pertamina's Upstream Directorate is currently detailing technologies that can be used. It targets the EOR can be done quickly so that the results can be felt immediately. One of these EOR technologies will be used to increase oil production in the Rokan Block after the operatorship is switched to Pertamina.

"Mr. Dharmawan [Pertamina Upstream Director] and SKK oil and gas are refining the technology that we can use to accelerate additional production in upstream oil and gas," said Nicke.

Even now, Pertamina through Pertamina EP has also implemented EOR in Tanjung Field. The company has also signed a core understanding between Pertamina and Repsol for the management of the full scale, including the implementation of the Surfactant-polymer EOR.

In the Jirak and Rantau Fields, Pertamina is conducting a Surfactant chemical application study for EOR implementation in both fields. Furthermore, Pertamina is currently conducting studies in several fields, namely Jatibarang, Sukowati, and Ramba for EOR with CO2 flooding.

Pertamina also expanded the EOR activities to the oil and gas block managed by PT Pertamina Hulu Energi (PHE), namely in the Offshore North West Java Block, precisely in the Zulu Field and E-Main. In addition, in the Batang field which is operated by PHE Siak, an EOR Steam flooding pilot project will be conducted in the near future.

Acquisition of oil and gas blocks

In addition to EOR, Nicke said that the acquisition of oil and gas production blocks overseas is also the company's strategy to accelerate the achievement of 1 million BPD oil production in 2026.

"Because it is a faster and more effective way to increase production, the acquired blocks will produce," Nicke said.

Referring to Pertamina's data, the state-owned company will budget upstream oil and gas investment funds this year US $ 3.7 billion. The funds will be used to develop the upstream oil and gas business organically and inorganically. 

   For details, funds for developing the upstream oil and gas business organically or increasing oil and gas production from existing assets of US $ 3.57 billion. Meanwhile, for inorganic business development of US $ 150 million.

Pertamina Upstream Director Dharmawan H Samsu Sempat explained that the upstream oil and gas inorganic investment is the addition of oil and gas block assets. Unfortunately, he was reluctant to mention which oil and gas block the company was targeting.

Dharmawan only mentioned one of the regions that the company targeted to add assets, namely in Africa. Previously, Dharmawan H Samsu also briefly mentioned targeting oil and gas assets in the Middle East region.

The last time Pertamina took over oil and gas assets in another country was in 2017. At that time, the company acquired 64.46% shares of the French oil and gas company, Maurel and Promm. Through this acquisition, the company has oil and gas assets spread in Gabon, Nigeria, Tanzania, Namibia, Colombia, Canada, Myanmar, Italy, and other countries.

However, the main assets that have been producing are in Gabon, Nigeria, and Tanzania. In addition, in Algeria, the company has shares in the Menzel Lejmet North (MLN) Block, El Merk (EMK), and Ourhoud (OHD). Next, in Iraq, the company holds shares in West Qurna 1. Field. While in Malaysia, the company holds shares in Block K, Block Kikeh, SNR Block SK309, and Block SK311.

Investor Daily, Page-9, Thursday, Feb 27, 2020.

PHE Develops Southeast Jambi Block

PT Pertamina (Persero) continues to strive to develop oil and gas in Indonesia, one of which is by participating in the management of the Southeast Jambi Work Area.

Repsol Exploration South East Jambi

At this time Repsol Exploration South East Jambi BM is acting as the operator of the Southeast Jambi Region and in collaboration with the Repsol Exploration South East Jambi B.V, Pertamina is confident and ready to develop the Southeast Jambi Exploration Working Area.

Ifki Sukarya

VP Relations of PT Pertamina Hulu Energi (PHE) Ifki Sukarya explained, as stipulated in Government Regulation Number 35 of 2004 concerning Upstream Oil and Gas Business Activities, this Cooperation was carried out through the process of taking ownership of participating interests from South-east Jambi Work Area operators.

In this case, Pertamina assigned one of its subsidiaries, PT PHE Southeast Jambi, as one of the participating interest holders in the Jambi South-east Working Area.

Repsol

"In order to realize this program, Pertamina continues to hold intensive discussions with Repsol Exploration South East Jambi B.V. at once communicating with the Government. Including the investment that will be carried out in the development of this Work Area, "added Ifki.

the signing of Participating Interest

Officially the signing of the collaboration was carried out by both parties, Repsol Exploration South East Jambi B.V. and PHE Southeast Jambi in the Central Jakarta Region.

The signing was carried out by the Director of PHE Southeast Jambi, Abdul Mutalib, with the General Manager of Repsol Exploration South East Jambi B.V. Greg Holman. One of Pertamina's corporate achievements in the early 2020, namely in cooperation with Repsol and MOECO in developing the Southeast Jambi Exploration Working Area.

This collaboration is the beginning of the partnership activities that will be carried out by the Upstream Directorate of PT Pertamina (Persero). Going forward, Pertamina will continue to look for opportunities to work with other Cooperation Contract Contractors (KKKS) to achieve Pertamina's production target of 923 thousand BOEPD in 2020.

Investor Daily, Page-9, Thursday, Feb 27, 2020.