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

PHE Jambi Merang Complete 2D Survey Without Accident

PT Pertamina Hulu Energi (PHE) Jambi Merang, a subsidiary of PHE, made a new history by completing the implementation of a two-dimensional (2D) Seismic Survey of a Firm Work Commitment (FWP) for the 31,140 km Jambi Merang Working Area on Monday (3 August) at 15.45 WIB. The success of completing this seismic exceeded the target of 30,000 km or 103.8% with no work accidents or zero incidents.

"Thank God, we are grateful PHE Jambi Merang was able to complete the 2D survey in less than a year during the Covid-19 pandemic," said Pertamina Hulu Energi Exploration Director Medy Kurniawan.

PT Elnusa Tbk (ELSA) Ship

A 2D seismic survey of the Jambi Merang KKP is the first implementation in an open area that began on November 20, 2019. It is hoped that Pertamina can continue to support the increase in national oil and gas production and reserves, especially to get a giant discovery.

According to Medy, the 2D PHE Jambi Merang survey was not only carried out in the Jambi Merang block area. Because it is open, the survey was also conducted outside the Jambi Merang area. 

    In this activity PHE Jambi Merang appointed PT Elnusa Tbk (ELSA), an affiliated company of PT Pertamina (Persero), to conduct a 2D survey starting from western waters to eastern Indonesia.

This 2D offshore seismic survey is the largest exploration activity over the past decade because it passes through Bangka waters to Seram Island in Maluku. In addition, this 2D seismic uses 2D seismic marine broadband technology and is carried out by a single operator, Elnusa's Elsa Regent Ship.

Elnusa's Elsa Regent Ship

Apart from the offshore 2D Seismic survey, a 3D seismic survey was also carried out in the Jambi Merang working area covering an area of ​​237 km2 covering two provinces, namely South Sumatra and Jambi, as well as three districts namely Musi Banyuasin, Banyuasin, and Muaro Jambi.

For information, this 2D seismic survey is part of the Jambi Merang Firm Work Commitment (FWP) until 2024 with an investment value of US $ 239.3 million. Specifically for exploration activities, in the Firm Work Commitment (FWP) US $ 196.5 million has been allocated to increase the discovery of reserves so that other exploration activities will be carried out in the future. 

    Medy said PHE will process and evaluate the 2D survey results. It is hoped that the results of the evaluation can be completed in December 2020.

"We are grateful to the government for giving the confidence to carry out the mandate of this work. Even though it was full of challenges, finally the 2D survey work was completed even earlier than the target. This is of course due to the support of all parties, the Ministry of Energy and Mineral Resources, SKK Migas, and other stakeholders, "he said.

Investor Daily, Page-12, Thursday, August 6, 2020

Global Investors Get Out of the Jumbo Oil and Gas Project

The future of energy investment in the country is threatened to fade. One by one foreign investors send signals that they will leave the jumbo oil and gas project in Indonesia. The latest news is that PT Chevron Pacific Indonesia is unlikely to continue the development of the Phase II Indonesia Deepwater Development (IDD) project in the Kutai Basin in Kalimantan Tmur.

PT Chevron Pacific Indonesia

The oil and gas company from the United States claimed to have no capital to develop the Phase II IDD project. This is because the IDD project is not a priority and is not included in the global Chevron Group portfolio.

the Phase II IDD project

Corporate Communication Manager of PT Chevron Pacific Indonesia, Sonitha Poernomo, revealed that the Phase II IDD project could not compete for capital in Chevron's global portfolio. Therefore, Chevron is ready to exit the US $ 5 billion project.

Sonitha Poernomo

"We believe this project will have value for other operators," said Sonitha Poernomo.

IDD is a deep sea gas project developed by Chevron Indonesia Company (Cico) through four production sharing contracts, namely PSC Ganal, Rapak, Makassar Strait and Muara Bakau. There are five gas fields ready to be developed, namely Bangka Field, Gehem, Gendalo, Maha and Gandang.

the Masela Block

Chevron's intention to leave the energy project adds to the list of foreign investors with plans to leave. Not long ago, Royal Dutch Shell (Shell) planned to sell Participating Interest (PI) at 35% in the Masela Block. The investment value of the gas block is around US $ 19.8 billion.

Royal Dutch Shell (Shell) 

Another foreign investor who wants to leave is Japan's Mitsui Corp. They plan to leave the Paiton power plant project, East Java. Mitsui holds 45.59 shares in the 2,045 MW power plant. Regarding the potential of the IDD project, Soenitha said, in fact the Kutai Basin was still an attractive hydrocarbon area. 

       Therefore, Chevron is confident that other operators can continue to develop. Until now, Chevron along with the government and potential partner partners have continued to establish communication to find solutions for the development of the IDD Block.

Eni

In this project, Chevron is the operator and majority shareholder of 63%. The remaining Eni, Tip Top, PT Pertamina Hulu Energi and Muara Bakau partners. Development of IDD Phase II includes the Gendalo-Gehem Field. Both fields will each have a floating production unit. 

     Discussion on Chevron's plan to leave the IDD Block has been busy since the beginning of this year. The signal is visible from Chevron's attitude of reluctance to provide a revised report on the IDD Block's development plan.

SKK Migas has not yet received certainty. Even though there are already several potential investors who have the potential to replace Chevron in the jumbo gas project. Acting Head of the SKK Migas Program and Communication Division, Susana Kurniasih, is still waiting for Chevron's official information. SKK Migas has written to Chevron related to the request for an explanation of Chevron's interest in phase II.

"The letter has been sent this week, so it takes time to wait for the answer," explained Susana Kurniasih, who was a former Voice Update Update journalist.

Dwi Soetjipto

The Head of SKK Migas, Dwi Soetjipto, explained that his party had continued to urge Chevron about the certainty of the continued management of IDD.

"We are still waiting for the Chevron report. Of course this should not be protracted," said Susana Kurniasih.

Hulu Migas practitioner, Tumbur Parlindungan assesses that there are several possibilities that make Chevron out of the IDD project. First, global conditions. Second, the problem of the transfer of management of the Rokan Block from Chevron to Pertamina. Third, the oil and gas investment climate in Indonesia might be considered unattractive for Chevron.

Kontan, Page-1, Friday, July 24, 2020

SKK Migas Urges Chevron to Immediately Decide on the Fate of the IDD Project

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) urged Chevron Indonesia to immediately ensure the continuation of the .

SKK Migas Head Dwi Soetjipto revealed that his party was still waiting for a report from Chevron regarding the follow up of the IDD Project. He said he had even pursued an oil and gas company from the United States to rush to make a decision whether to continue this project or not.

"So our position is waiting for a report from Chevron. Of course, this should not be protracted, and we have urged Chevron, "he said.

It understands that after the Covid-19 pandemic and low oil prices, many planned activities must be reviewed by oil and gas companies. The current condition has an impact on all major oil and gas projects in the world. As a result, Chevron's follow-up on the IDD Project has been hampered.

    However, it urged Chevron to immediately report its plans related to the IDD Project. Moreover, Chevron is not the only oil and gas company interested in working on the deep-sea gas project in the Makassar Strait.

"Actually there are other parties who are also interested in this matter [IDD Project]. But of course, we are waiting for the official report from Chevron first, "said Dwi.

Referring to SKK Migas data, as of last June, the IDD Project is still in the process of evaluating the approval of the revised development plan (POD). In addition, the project is also still in the process of evaluating the proposed production sharing contract (PSC) for the Rapak Oil and Gas Block and Ganal Oil and Gas Block.

The IDD project combines two oil and gas fields, namely Gendalo Field, Ganal Block, and Gehem, Rapak Block. Still based on SKK Migas data, the project is targeted to reach peak gas production of 844 million 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.

In fact, the Rapak Block contract will expire in 2027, while the Ganal Block in 2028. In addition, Deputy Head of SKK Migas Fatar Yani Abdurrahman had revealed, there was a change in the design of the IDD project, namely the production platform was moved to shallow water. Therefore, POD changes are needed.

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

Investor Daily, Page-9, Saturday, July 18, 2020

See Pertamina's New Structure

Friday, June 12, 2020, became a special day for PT Pertamina (Persero), because at that time through the General Meeting of Shareholders (GMS) held virtually during the Covid-19 pandemic, the structure of this oil and gas BUMN changed.

Although there have been many speculations circulating before, starting from the very hot one, namely the issue of replacing the President Director to the changes in the composition of the directors, the results gave many surprises. The government decided to keep Nicke Widyawati as President Director. For this, the government has its own reasons.

Nicke Widyawati

"So far, Nicke Widyawati is still the best as Pertamina's Managing Director, because it is able to carry out the tasks assigned," said SOE Minister Erick Thohir.

SOE Minister Erick Thohir

The government has also streamlined the number of directors from 11 to six, and the nomenclature of the position of directors of the state-owned oil and gas company has also been changed namely the finance director, director of logistics and infrastructure, director of human resources, director of business support and director of the portfolio strategy and new ventures.

What made the public ask was when the AGM abolished the positions of upstream director, corporate marketing director, retail marketing director, processing director, and director of processing and petrochemical megaprojects.

No wonder, considering that this position is very strategic for Pertamina which incidentally has a core business in the oil and gas sector. In addition, Pertamina also has a 'big project' which is building a number of oil refineries. However, it turns out the government wants the special business to be handled by a subsidiary (sub-holding).

"The establishment of this sub-holding is to integrate Pertamina's business which is handled by a number of its subsidiaries to become one focus," said Erick.

Fajriyah Usman

Pertamina Corporate Communication Vice President Fajriyah Usman explained, as holding Pertamina's duties would be directed at managing portfolios and business synergies throughout the Pertamina Group, accelerating the development of new businesses and running national programs.

Whereas the sub-holding will play a role to encourage operational excellence through the development of scale and synergy of each business, accelerate the development of existing business and business capabilities as well as increase the ability and flexibility in partnership and funding that is more profitable for the company.

Through this new structure, Pertamina is expected to become more agile, focused, and faster in developing world-class capabilities in its business. This is expected to accelerate the growth of the business scale to become a leading global energy company with a market value of US $ 100 billion and to be a driver of social development in 2024. 

    Energy Watch Executive Director Mamit Setiawan assesses the change in nomenclature within the new organization in Pertamina, as the efforts of the Ministry of SOEs in making Pertamina more efficient and better.

Sub Holdings

The five sub-holding companies are upstream sub-holding whose operations are handed over by PT Pertamina Hulu Energi (PHE), gas sub-holding by PT Perusahaan Gas Negara (PGN) Tbk, processing and petrochemical sub-holding by PT Kilang Pertamina International, electricity holding sub-companies and renewable energy by PT Pertamina Power Indonesia, PT Patra Niaga's commercial and marketing sub-holding, and shipping sub-holding by PT Pertamina International Shipping.

     Pertamina President Director Nicke Widyawati said that the transformation was carried out to prepare Pertamina's business lines to develop and be independent. Because at present Pertamina's business scope is very broad with different challenges and competitions and has specific risks of each.

"Therefore, with this sub-holding, every business can move faster and agile to develop world-class capabilities and business scale growth that will support Pertamina to become a leading global energy company with a market value of US $ 100 billion," said Nicke.

If you pay attention, the composition of Pertamina's sub-holding is not much different compared to that of other foreign oil and gas companies such as Petronas Malaysia and PTT Thailand. 

   In Petronas for example, there are 5 sub-holding companies including Upstream namely Petronas Carigali, International Business namely Petronas International Corporation, Downstream Business namely Petronas Chemical Group Berhad, Marketing, and Trading Business by Petronas Trading Corporation, and Power Business by Petronas Power. Regarding this matter, Mamit considers that there are indeed similarities with Petronas.

"Yes, I see it almost the same concept," he said.

He also agreed if one of the sub-holding conducted an IPO.

"Petronas has a shipping sub-holding named MISC Berhad and has an IPO and has now traveled everywhere," he said.

Another innovation made by the government and Pertamina is to place a number of young workers in strategic sub-holding positions. One of them, Mars Ega as Director of Business Planning and Development in the Commercial and Trading sub-holding. This 41-year-old young man said that this was a big challenge.

"But it must be realized that sooner or later a company needs regeneration, so what is more important is that every young worker must prepare well to become a successor to the company's management," he said.

He felt the benefits of Pertamina's talent development programs, especially in developing business and leadership competencies.

"This also shows that the company does not only look at the seniority side in the process of determining the position, hopefully, but this can also be an encouragement for other friends to make more achievements," he explained.

Investor Daily,  Page-12, Wednesday, June 17, 2020