Three Upstream Oil and Gas Projects Ready to Onstream

    The Special Task Force for Upstream Oil and Gas Business Activities or SKK Migas stated that as many as three upstream oil and gas projects are projected to start operating or onstream in the remaining time of this year.

Blogger Agus Purnomo in SKK Migas

    SKK Migas Deputy Operations Julius Wiratno said that of the 12 projects that have been onstream until the third quarter of 2021, there are still 3 more projects that are being prepared to increase production by around 3,000 barrels of oil per day/BOPD.

    Julius said Pertamina EP's SP Bambu Besar (Asso) project is estimated to provide additional gas production of 7 MMscfd, the Bukit Tua Project Phase 3 Petronas Carigali Ketapang II Ltd. with the potential for additional production of 14,000 BOPD and 30 MMscfd of gas. Then, one of the National Strategic Projects (PSN) for upstream oil and gas, namely Jambaran Tiung Biru Pertamina EP Cepu with a gas production potential of 330 MMscfd.

Blogger Agus Purnomo in Petronas Carigali Ketapang

"SP Bambu Besar Pertamina EP is about to be completed, the plan is to onstream this November. Bukit Tua Phase 2B will stream in December," he said.

    Meanwhile, as many as 12 oil and gas projects have successfully streamed, making the 2021 target 100% realized. The project provides additional national oil and gas production of 14,486 BOPD and 489 MMscfd of gas, with a total investment of US$1.5 billion, or equivalent to Rp21.75 trillion.

    Julius said, if all these projects can be realized, the investment figure will increase to US$ 2.92 billion or equivalent to Rp. 42.34 trillion. According to him, the acceleration of completion of upstream oil and gas projects cannot be separated from the impact of the high increase in world oil prices, above US$80 per barrel.

"World oil prices that continue to increase throughout 2021 encourage KKKS to accelerate the completion of upstream oil and gas projects so that in the third quarter of 2021 the target has been achieved 100 percent. The performance of the completion of upstream oil and gas projects will have a positive impact on accelerating the realization of upstream oil and gas investment until the end of 2023," he said.

    Referring to the results, said Julius, SKK Migas is optimistic that the entry rate at the beginning of next year will be at an optimal level.

    Regarding the JTB project, Julius said there is still a construction stage, pre-commissioning. According to him, the Covid-19 pandemic has had an impact on the progress of the project.

    Julius said the Covid-19 pandemic also had an impact on the limited workforce that could be deployed to the field. Weather constraints are one of the inhibiting factors for the current construction completion.

    Progress is about 94% more. We are still trying to get gas in at the end of 2021," he said.

PEPC

    Previously, PEPC President Director Awang Blueuardi said that the synergy between SOEs in the construction of the JTB gas unitization field development project belonging to Pertamina EP Cepu (PEPC) Zone 12 Eastern Indonesia Subholding Upstream Pertamina was expected to remain solid even though it was carried out in the midst of the Covid-19 pandemic.

    He said there were many challenges faced by this project during the pandemic, but his party continued to strive to develop innovations and coordinate so that they could continue to solve them.

Bisnis Indonesia, Page-4, Thursday, Nov 4, 2021

Five Oil and Gas Contractors Sign Joint Contracts for Procurement of Rigs

    A total of five oil and gas companies signed a joint contract to use the jack-up rig Soehanah to realize the target of drilling wells in their respective oil and gas blocks. In addition to speeding up drilling, joint procurement of these rigs will also save costs and ultimately make the realization of investment costs that must be returned (cost recovery) more efficient.

rig Soehanah

    The five companies that signed the Jack Up drilling Rig contract Provision are Medco E&P Natuna Ltd, Mubadala Petroleum, Petronas Carigali, Premier Oil Natuna Sea BV, and Kuwait Foreign Petroleum Exploration Company (KUFPEC), with PT Vantage Drilling Company Indonesia.

Blogger Agus Purnomo in Petronas Carigali Ketapang

    Head of the Supply Chain Management and Cost Analysis Division Erwin Suryadi appreciated the joint procurement of rigs by the five cooperation contract contractors (KKKS) this. The existence of a joint contract provides certainty of the well's drilling schedule. This will ultimately support the achievement of the targets of 1 million barrels per day (BPD) and 12 billion standard cubic feet per day/BSCFD by 2030.

"With this joint contract, the commitment to drilling 12 development wells, 1 workover well, and 5 exploration wells can be fulfilled," he said.

    Not only speeding up the drilling process, but joint contracts will also increase cost recovery efficiency. From the signed contract,

    Medco Natuna E&P achieved efficiencies of up to US$ 5 million and other oil and gas companies of US$ 3.5 million. In the future, he hopes that this joint contract can also be applied to other contracts.

"The strategy of using joint contracts, especially for rig equipment which is very expensive, is one of the strategies that will be developed in the future, especially in stimulating exploitation and exploration activities to support the increase in national oil and gas production in a sustainable manner," said Erwin.

    President Director of Medco E&P Indonesia Ronald Gunawan said that his party always made various exploration and production activities efficient. However, on the other hand, his party still prioritizes the safety aspect in carrying out operations.

"We are grateful for the support of SKK Migas, other KKKS partners, and partners so that this amendment can be carried out," said Ronald.

Blogger Agus Purnomo in SKK Migas

    The realization of Wells drilling that has not been optimal is one of the reasons why the oil and gas production target has not been achieved this year. Referring to SKK Migas data, until last June, the realization of drilling development wells was still 186 wells from the target of 616 wells. 

    Furthermore, the realization of rework (workover) wells was 309 wells or 50% of the target 615 wells and the realization of drilling exploration wells was only 13 wells or 27% of the target 48 wells.

    As of June, the realization of oil and gas lifting was still recorded at 1.6 million barrels of oil equivalent per day (BOEPD) or 95.6% of the target of 1.7 million BOEPD. In detail, oil lifting reached 666.6 thousand BPD or 94.6% of the APBN target of 705 thousand BPD, and gas was 5,430 million standard cubic feet per day/MMscfd or 96.3% of the 5,638 MMscfd targets. 

Investor Daily, Page-9, Saturday, Aug 7, 2021

Pertamina is back in the Fortune Global 500

    PT Pertamina (Persero) re-registered its name as the only Indonesian company to be included in the 2021 Fortune Global 500 list. With a company revenue value of US$ 41.47 billion in the 2020 financial year, Pertamina is in position 287.

"We would like to thank all stakeholders because Pertamina's achievements cannot be separated from the positive support from various parties, both the directors, the board of commissioners and all Pertamina Group employees, as well as shareholders, the government, and the community. This is also an international recognition that Pertamina is equal to other world-class companies," said Pertamina's President Director, Nicke Widyawati.

Nicke Widyawati

    Nicke said, in the challenges of the pandemic since last year, Pertamina faced a triple shock so that it suffered a significant decline in revenue. However, with innovations and business breakthroughs carried out in all business lines and the ongoing organizational transformation, Pertamina was able to increase the company's revenue to US$ 41.47 billion and make a profit of US$ 1.05 billion in 2020. As a BUMN, Pertamina is also consistent. 

Pertamina

    Ensure the supply of energy for the country through various programs, including One Price Fuel, Conversion of Oil to Gas for Fishermen and Farmers, construction of Natural Gas Transmission & Distribution Networks, as well as other downstream infrastructure.

    Through the achievement of Pertamina's operational and financial performance, the total government revenue in 2020 contributed by Pertamina almost reached Rp 200 trillion, namely through tax payments, dividends, Non-Tax State Revenue (PNBP) worth Rp 126.7 trillion, as well as state revenues from oil. The State Shares of Crude and Condensate (MMKBN) from Pertamina's oil and gas blocks amounted to Rp 73.1 trillion.

    With an energy ecosystem that continues from upstream to downstream, Pertamina maintains the survival of 1.2 million direct workers and the multiplier effect on around 20 million workers indirectly. Pertamina's support for the wider community for the recovery of the pandemic also continues to be felt. 

    Starting from the construction of several Covid-19 hospitals, transportation assistance for oxygen distribution, to Pertamina's attention to more than 13,000 MSMEs affected by the pandemic to be able to survive and even upgrade to class.

“The challenges of the Covid-19 pandemic are not light. In addition to strengthening steps to achieve the target market value of US$ 100 billion by 2024, all levels of management and employees remain focused on providing services to the community. We are optimistic that it will continue to grow and continue to provide the widest possible benefits for the community and the country,” said Nicke.

    The Fortune Global 500 ranking is an annual event conducted by Fortune magazine since 1955. The main benchmark is the amount of revenue, including consolidated gross revenue. Other indicators are shareholder equity participation, market capitalization, profits, number of employees, and since 1990 the company's country of origin indicator has also been considered in the Fortune Global 500. Several names of international oil companies are also listed in the 2021 Fortune Global 500 ranking.

    Although financially managed to achieve significant revenues, the company suffered losses. Among them are BP (ranked 18), Royal Dutch Shell (19), ExxonMobil (23), Chevron (75), and Petronas (277). Below Pertamina's ranking, Repsol is in position 381, while from other industries there are Coca-Cola (370), Tesla (392), and Danone (454).

Erick Thohir

Erick: The Form of Hard Work

    Meanwhile, SOE Minister Erick Thohir considered Pertamina's entry into Fortune's list of the world's 500 largest companies as a form of hard work from all elements of the company.

"I am optimistic that Pertamina's performance can be even better. And the frame for Pertamina is to compete with competitors at the world level. Because Pertamina has all the requirements, both quality and capability, to support it as one of the world's big companies," said SOE Minister Erick Thohir.

    Erick views the world's recognition of Pertamina's existence as evidence of ongoing organizational reforms. One of the changes that he considered important as implementing the company's core values ​​that we're trustworthy, competent, loyal, adaptive, and collaborative. So far, Pertamina has never lacked qualified resources.

“But resources without the appropriate value will certainly not be in line with performance. We certainly strive together, so that values ​​that uphold good corporate governance can be the basis. With that, I'm sure performance will follow. Because the results will not betray the process," said Erick Thohir.

    He also highlighted Pertamina's performance from a business and non-business perspective in the midst of the Covid-19 pandemic that is sweeping the world. In the midst of a pandemic that affected the slowdown in the business sector, Pertamina was still able to become one of the driving forces of the economy. Not only that, but Pertamina also plays an active role in efforts to recover from the pandemic from a health perspective.

"Not only performance from the business side, in the current pandemic era we can see the central role of Pertamina through several business lines to support public health. Starting from hospitals, hotels which have been converted as places of isolation and rest for health workers, to actively participating in ensuring the availability of oxygen, "said Erick Thohir.

    Erick hopes that all positive performances, both on the business and non-business sides, can continue to be improved. As a business-oriented company as well as providing services to the public, Pertamina should not be satisfied.

“Our benchmark must be high. So it's not enough just to be in the top 500, we can do even better. Our dream is that Pertamina can become the 50 largest companies in the world and our other SOEs will also enter the top 500," said Erick Thohir.

Investor Daily, Page-1, Wednesday, Aug 4, 2021

East Java Potentially Excess Gas Supply

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that East Java will have an excess gas supply of up to 200 million standard cubic feet per day / MMscfd in 2022-2025. This is after the completion of a number of gas projects in the region at the end of this year.

Blogger Agus Purnomo in SKK Migas

    Deputy of Finance and Monetization of SKK Migas, Arief S Handoko, said that at least three oil and gas projects in East Java will be completed by the end of this year, namely the Jambaran-Tiung Biru (JTB) Project, Sidayu and Bukit Tua Phase 2B owned by Petronas. 

Blogger Agus Purnomo in Petronas PC Ketapang II

    The three of them will increase the gas supply in East Java. With this potential gas supply, SKK Migas hopes that the gas user industry can optimize business deals fairly and stick to the provisions in the Minister of Energy and Mineral Resources Regulation Number 8 of 2020 and Minister of Energy and Mineral Resources Decree Number 89 of 2020 which regulates gas prices for certain industries.

"While gas prices from upstream are very economical, we hope that the government can encourage the growth of the gas user industry in East Java and Central Java so that this gas potential can be purchased so that it can drive the regional economy and create a bigger multiplier effect," said Arief.

    Referring to SKK Migas data, the additional supply from the JambaranTiung Biru, Sidayu, and Bukit Tua Phase 2B projects is estimated at 226.2 MMscfd. The Jambaran-Tiung Biru Field Unitization Project undertaken by PT Pertamina EP Cepu (PEPC) will produce gas up to 192 MMscfd. 

The Jambaran-Tiung Biru Field

    Meanwhile, the additional supply from the Sidayu Project is 4.2 MMscfd for gas and 7 thousand barrels per day (bpd) for oil, and Bukit Tua Phase 2B 30 MMscfd for gas and 12,500 bpd for oil.

"The largest additional supply will be obtained from the JTB Project which we estimate will be on stream in the fourth quarter of 2021. This project can supply gas amounting to 192 MMscfd, which will be supplied not only to East Java but also to Central Java, "said Arief.

    He explained that the Jambaran-Tiung Biru Project, which was included in the list of National Strategic Projects (PSN), was scheduled to start production last year. However, the Covid-19 pandemic last year caused delays in completing this project this year. Apart from the three projects, previously there was a West Pangkah Project operating.

"At the beginning of the year there was also the West Pangkah Petronas Project which increased gas supply from the Pangkah Block, so it can be said that the amount of gas supply in East Java for 2021 will be fulfilled," he explained.

    The West Pangkah project produced 23 MMscfd of gas and 2,200 bpd of oil. To increase the utilization of this gas supply, Arief continued, his party is also encouraging the completion of the Cirebon-Semarang pipeline in order to develop the gas market in Central Java. The reason is, currently, a Gresik-Semarang pipeline has been built that can carry gas from East Java to Central Java.

"In the future, we hope that the Cirebon-Semarang transmission pipeline can be built, so that with this gas pipeline, the excess gas supply in East Java will be channeled to support the fulfillment of gas needs for industries in Central Java," said Arief.

    In fact, referring to the Gas Balance, which was compiled in 2018, East Java is one of the areas projected to have a gas supply deficit. This projection refers to the second scenario in the balance sheet which estimates gas demand based on the previous year's consumption realization and economic growth targets. The gas deficit of 563.23 MMscfd in East Java-based on this scenario will occur in 2027.

Investor Daily, Page-10, Friday,  April 16, 2021

Kepodang Field supplies gas again

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the Kepodang Field, Muriah Block, returned to flow gas since last February. This gas supply is around 20 million standard cubic feet per day / Mmscfd. 

Blogger Agus Purnomo in SKK Migas

    SKK Migas Operations Deputy Julius Wiratno said that the gas supply from the Kepodang Field has been flowing since some time ago to PLTGU Tambaklorok owned by PT PLN (Persero).

Kepodang Field

"We have returned gas from the Kepodang Field some time ago at a rate of around 15-20 MMscfd," he said.

    This was also confirmed by the Regional Business Director for Java, Madura, and Bali PLN Haryanto WS.

"It is true, the gas from the Kepodang Field has been flowing again," he said.

    Kepodang Field, Blok Muriah started producing 56 MMscfd of gas for the first time at the end of August 2015. This gas supply is supplied by the Kalimantan-Java (Kalija) I pipeline managed by PT Kalimantan Jawa Gas (KJG) to the Tambak Lorok in Semarang Center Java Steam Gas Power Plant (PLTGU) belongs to PLN. 

Blogger Agus Purnomo In Petronas PC Ketapang II

    However, in July 2017, Petronas stated that the Kepodang Field was in force majeure because reserves did not match predictions.

    This field gas production was then stopped on September 23, 2019. PT Saka Energi Indonesia then received permission from SKK Migas to restart gas production in the Kepodang Field.

    In the future, his party cannot confirm whether the gas production at Kepodang Field can be increased. The reason is that the field development plan is still being discussed by Saka Energi.

"Regarding the next development plan, we are still evaluating it by considering Saka's potential," he said.

    Director of Strategy and Business Development, Syahrial Mukhtar, once revealed that the Kepodang Field has the potential to produce natural gas on average around 15 billion British thermal units per day / BBTUD for 37 months since the first gas flow (gas in).

    This supply is planned to be channeled to PLTGU Tambak Lorok in Semarang and industrial customers in Central Java with a total volume of around 10-20 Mmscfd. PGN has been involved in managing the Kepodang Field, Muriah Block from the start through Saka Energi Muriah Limited (SEML) with a 20% PI ownership.

Blogger Agus Purnomo in PGN Saka Energi Muriah Limited

    However, Petronas Carigali Muriah Limited (PCML) and SEML have signed a legal document for the transfer of Petronas' participating interest or Deed of Assignment (DoA) participating interest shares at the end of January. Thus, now SEML holds 100% participating rights in the Muriah Block.

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

Gas Supply from Kepodang Field Has Been Flowing

 

    Gas distribution from Saka Energi Muriah Ltd (SEML) 's Kepodang Field to meet the gas needs of the Tambak Lorok Power Plant in Central Java Province has started in February 2021. Acting Head of Program and Communication Division of SKK Oil and Gas (SKK Migas) Susana Kurniasih revealed the distribution gas that was previously delayed has been resumed.

Blogger Agus Purnomo in SKK Migas

"The flow has started since February, to be precise February 19, 2021," said Susana.

    Susana continued that the gas distribution volume for the Tambak Lorok Semarang Gas Power Plant (PLTG) is around 8 billion British Thermal Units per Day (BBTUD) to 10 BBTUD. SKK Migas Operations Deputy Julius Wiratno confirmed that the distribution of gas from the Kepodang Field has been carried out.

"Everything is channeled to PLN according to production which is only about 20 MMSCFD," explained Julius Wiratno.

Blogger Agus Purnomo in Petronas Carigali 

    The Muriah Operatorship has shifted from Petronas Carigali Muriah Ltd (PCML) to Saka Energi Muriah Limited (SEML). After the legal document for the transfer of the participating interest or Deed of Assignment (DoA) was signed by the two contractors at the end of January last year. 

Kepodang Field

    Kepodang Field is part of the Muriah Work Area, which is located off the coast of East Java. This field started producing natural gas for the first time of 56 million cubic feet per day (MMSCFD) at the end of August 2015.

Kontan, Page-13, Wednesday,  March 17, 2021

Again, Oil Reserves Found in Madura

 

       Petronas, through its company, PC North Madura II, managed to find oil reserves through the Hidayah-1 Exploration well in the North Madura II Working Area, which is located off the coast of East Java, Indonesia. The discovery was a result of the Hidayah-1 Exploration well drilling started on January 7, 2021, and has reached a depth of 2,739 meters.

Emeliana Rice-Oxley

    Vice President of Exploration, Upstream Petronas Emeliana Rice-Oxley said, Hidayah-1 well managed to find a reservoir layer containing good quality oil in the Ngimbang Carbonate Formation and had a flow test result of 2,100 barrels of oil per day (BOPD) with high quality also good.

"The discovery of the Hidayah-1 Exploration well is a major historical landmark for the North Madura II Work Area as evidenced by the potential for an oil-filled reservoir layer in the area," said Emeliana Rice-Oxley.

"This also encourages the development of the large promising potential of Exploration in Indonesia," said Emeliana Rice-Oxley.

Blogger Agus Purnomo In SKK Migas

    According to the plan, the results of the Hidayah-1 Exploration well drilling will be further evaluated to determine the potential size of these reserves. Meanwhile, Deputy for Planning of SKK Migas Jaffee A Suardin said that currently, his party is conducting a final analysis related to determining the number of resources.

"Of course, this discovery in the future will provide benefits for local governments and local communities after the potential for oil can be produced," he said.

Surya, Page-7, Friday, Feb 26, 2021

Petronas Finds New Oil Reserves in Madura

 

    Petronas' subsidiary, PC North Madura II Ltd., managed to find oil reserves through the Hidayah-1 Exploration well in the North Madura II Working Area, which is located off the coast of East Java, Indonesia. 

Blogger Agus Purnomo in Petronas PC Ketapang II

    PC North Madura II Ltd. is the sole operator with a participating interest of 100 percent in the North Madura II Working Area. The drilling of the Hidayah-1 exploration well began on January 7, 2021, and has reached a depth of 2,739 meters.

    The Hidayah-1 well succeeded in finding a reservoir layer containing oil with good reservoir quality in the Ngimbang carbonate formation and having a flow test result of 2,100 barrels of oil per day (BOPD) with good oil quality.

"The results of the Hidayah-1 exploration well drilling will be further evaluated to determine the potential size of these reserves," said Emeliana Rice-Oxley, Petronas Vice President of Exploration, Upstream.

Emeliana Rice-Oxley

    She emphasized that the discovery of the Hidayah-1 Exploration well is a major proof of success for the North Madura II Work Area, which is proven by the potential for a reservoir layer containing oil in the area.

"This also encourages the development of promising exploration potential in Indonesia. We will always collaborate with the Indonesian government to realize clean and sustainable energy for Indonesia," She said.

                                Blogger Agus Purnomo in SKK Migas

"We are grateful for the great support provided by SKK Migas and the Sampang district government in the successful drilling of the Hidayah-1 exploration well. This discovery is evidence of Petronas' commitment to continuing the development of the upstream oil and gas business in Indonesia," added the President of PC North Madura II Ltd. Mohd Nazlee Rasol.

    Petronas is also the operator of the Bukit Tua Iapangan off the coast of East Java and is a partner of six other Cooperation Contractors located on the mainland and off the coast of Sumatra, Natuna, East Java, and Kalimantan.

Harian Bangsa, Page-4, Friday, Feb 26, 2021

Heavy Duty Runway Lifting

 

Improving the performance of upstream oil and gas is still homework that needs to be completed by industry players in the country, in line with the low lifting achievement by some contractors.

Blogger Agus Purnomo in SKK Migas

Based on data from the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), out of 15 large cooperation contract (KKKS) contractors that produce oil and condensate, eight companies are unable to meet the production targets ready for a sale (lifting) in the work program and budget (work program and budget / WP & B) 2020.

PT Pertamina EP

PT Pertamina EP, for example, realized lifting reached 93.5% of the WP&B. A similar condition occurred in Conocophillips (Grissik) Ltd with a lifting achievement of 92.2% from WP&B. 

Blogger Agus Purnomo In Petronas Carigali Ketapang

    Meanwhile, Petronas Carigali (Ketapang) Ltd was only able to record a lifting of 76.8% of the target. On the other hand, the KKKS with the largest oil production and lifting, ExxonMobil Cepu Limited (EMCL), is still able to meet the target in 2020 with the realization of lifting reaching 217,637 barrels per day (bpd) from the Cepu Block.

the Cepu Block and Banyu urip Field

This achievement came from the Banyu Urip field production which had reached a peak production of 230,000 bpd. In gas lifting, out of 15 large KKKS, there are also eight companies that are unable to meet the target according to WP&B, namely Conocophillips (Grissik) Ltd, Pertamina EP, Eni Muara Bakau B.V, and Medco E&P Natuna. 

Blogger Agus Purnomo In PHE-WMO

    Then, other contractors who failed to reach the target were Pertamina Hulu Energi West Madura Offshore (PHE-WMO), PT Pertamina Hulu Energi Jambi Merang, Husky-CNOOC Madura Ltd (HCML), and Pearl Oil (Sebuku) Ltd.

Deputy for Operations of SKK Migas, Julius Wiratno explained that his party was preparing a warning or warning for KKKS that did not reach the target in accordance with the deal.

"For the 2020 performance, a 'love letter' is currently being drafted, this week it is [sent]," he said.

He emphasized that the KKKS could get sanctions for not being able to achieve the target. Sanctions can be in the form of tightening KKKS spending until the KKKS work plans and budgets are not approved.

"There are also those whose cost recovery is not approved if it is not in accordance with the initial agreement," he said.

He also highlighted a number of subsidiaries of PT Pertamina (Persero) that have not been able to meet the lifting target last year. Julius assessed that this was due to economic problems in the field. However, SKK Migas and Pertamina have made an agreement to improve performance this year. 

    Previously, the President Director of PT Pertamina Hulu Energi, Budiman Parhusip, said that Pertamina has challenges with a high decline rate due to managing old fields. However, his party has prepared a number of contracts related to the drilling program to optimize lifting.

"We hope that the full cooperation will run smoothly," he said.

Meanwhile, Pertamina is planned to manage around 60% of the oil and gas fields in Indonesia. Currently, about 40% are still managed by this state-owned company. With this projection, the government also has high hopes for Pertamina in achieving the oil lifting target of 1 million BPD. Meanwhile, the government is deemed necessary to intervene in the decline in Pertamina's performance in the national upstream oil and gas sector.

Trisakti University lecturer Pri Agung Rakhmanto explained that the main factor for Pertamina's decline in production last year was due to the economy in the field plus the pressure of the Covid-19 pandemic. According to him, old fields have an effect on the decline in investment and Pertamina's business activities. Meanwhile, the Covid-19 pandemic has resulted in limited operational activities.

"Pertamina is now the backbone of national production with more and more blocks being transferred to it by mistake. The government should be able to provide more support, "he said.

He suggested that the cooperation contract should include fiscal aspects affected by the latest economic conditions. Meanwhile, Executive Director of the National Oil and Gas Companies Association (Aspermigas) Moshe Rizal said that the fall in oil prices coupled with a decrease in demand due to the Covid-19 pandemic has indeed put heavy pressure on KKKS financially. 

    In addition, operational activities are hampered by large-scale social restrictions (PSBB) even though the budget is available. As a result, project execution is hampered, including maintenance operations, workovers, and other activities that can help maintain production levels.

"For this year, everything depends on how fast we recover economically and how fast the distribution of vaccines is so that it can reduce the infection rate," he said.

The President Joko Widodo

PRICE OF POWER PLANT GAS

President Joko Widodo has set the price of natural gas for power plants at a maximum of US $ 6 per MMBtu. The regulation is in Presidential Regulation Number 121 of 2020 concerning Amendments to Presidential Regulation Number 40 of 2016 concerning Natural Gas Pricing which was promulgated on December 29, 2020. In Article 4 Paragraph 3 it is stated that the determination of certain natural gas prices can be given to natural gas users. engaged in the supply of electricity for the public interest. 

This Presidential Regulation is in line with the Minister of Energy and Mineral Resources Regulation Number 10 of 2020 concerning Amendments to the Regulation of the Minister of Energy and Mineral Resources Number 45 of 2017 concerning Utilization of Natural Gas for Power Plants. This regulation confirms the adjustment of the gas price for PT PLN (Persero) 's needs to be the US $ 6 per MMBtu.

Bisnis Indonesia, Page-4, Thursday, Jan 7, 2021

Wait PLN, Field Kepodang Ready to Stream Gas

PT Perusahaan Gas Negara Tbk (PGN) stated that gas production from Kepodang Field, Muriah Block will flow after the gas sale and purchase agreement (PJBG) with PT PLN (Persero) is signed. PGN is also optimistic that it will win an arbitration suit against Petronas Carigali Muriah Ltd (PCML) following the cessation of Kepodang Field gas production in September 2019.

PGN President Director Suko Hartono said that 80% of participating interest / PI ownership in Muriah Block which was initially held by PCML had been transferred to his party through Saka Energi Muriah Ltd (SEML). Thus, his party can produce Kepodang Field.

"So at least there is a gas flow of 10-20 MMSCFD (million standard cubic feet per day)," he said.

Kepodang Field, Blok Muriah started producing gas for the first time at 56 MMSCFD at the end of August 2015. The gas supply was channeled with the Kalimantan-Java (Kalija) I pipeline managed by PT Kalimantan Jawa Gas (KJG) to the Steam Gas Power Plant (PLTGU) Tambak PLN's Lorok in Semarang, Central Java.

Bloggger Agus Purnomo in Petronas Carigali Ketapang

However, in July 2017, Petronas stated that Kepodang Field was in force majeure because the reserves did not match the predictions. This field gas production was then stopped on 23 September 2019.

Suko added, his party had received permission from the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) to restart gas production at Kepodang Field. But he was not sure when the gas would start flowing because it was still waiting for the gas purchase agreement by PLN.

"This is what we are trying to do so that gas production can be in 2020-2021. We are waiting for the PJBG, "he said.

Previously, Saka Energi had sent an official letter to PLN regarding gas supply from Kepodang Field. Another commercial aspect that needs to be prepared is the Gas Transportation Agreement (GTA), where Saka will negotiate with KJG as a transporter.

PGN has been involved in the management of Kepodang Field, Blok Muriah from the beginning through SEML with 20% PI ownership. However, PCML and SEML have signed legal documents on the transfer of a participating interest or the Deed of Assignment (DoA) of Petronas participation shares at the end of January.

So, now SEML holds 100% interest participation in the Muriah Block. Even though the production has stopped since September 2019, the function testing activities for important equipment in the Kepodang Field are still carried out routinely. Over the past five months, Saka and Petronas have also made operational transitions, including conducting joint operations trials to keep operating facilities functioning properly. This is so that Saka can directly produce gas as soon as management switches.

Arbitration Lawsuit

At the same time, PGN Finance Director Arie Nobielta Kaban revealed, the lawsuit against Petronas Carigali related to the cessation of Kepodang Field gas production in the Arbitration International Chambers of Commerce (ICC) is still rolling. He is optimistic he can win this lawsuit.

"There is potential [to win], according to our lawyer, the gap is very large, around 70%, we won," he said.

The arbitration award is likely to come out in 2021. The lawsuit was filed because PGN also holds an 80% stake in KJG, in addition to the PI in the Muriah Block. Kaban explained the cessation of the Kepodang Field gas supply had an impact on the value of the KJG Kalija I pipeline.

"So, this pipe needs to be impaired in accounting because the book value is higher, which is the US $ 98 million," he said.

Previously, according to a letter from the Board of Directors of PGN on the Indonesia Stock Exchange (IDX) securities information disclosure in September 2019, the lawsuit was related to ship or pay obligations as stipulated in the gas transportation agreement between PCML, KJG, and PLN.

Because PCML ended the GTA with KJG and PLN earlier than the agreement following the end of the PJBG with PLN. PGN had revealed that based on the initial plan, the gas flowed through Kalija I Pipe reached 116 million MMSCFD. However, to guarantee the company's investment in the pipeline, a ship or pay scheme was established with a minimum limit of gas flowing at 104 MMSCFD.

The realization, since the Kepodang Field began production in 2015, the gas flowed through Kalija I Pipe has always been below the minimum limit. In 2015, the gas flowing was only 86.06 MMSCFD. Furthermore, Kepodang Field only releases gas of 90.37 MMSCFD in 2016 and 75.64 MMSCFD in 2017.

Investor Daily, Page-17, Friday, July 10, 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