Crude Oil The Rokan Block starts processing at the Pertamina refinery

PT Pertamina (Persero) implements the initial lifting of crude oil (crude oil part of PT Chevron Pacific Indonesia (PT CP) in the Rokan Block, which will be processed at Pertarmina's domestic oil refinery in the initial phase for the period January to June 2019, estimated volume estimated at 2.5 million barrels per month.

the Rokan Block

Inaugural lift, according to a press release received by Investor Daily, was officially inaugurated symbolically with a lifting button at Port Wharf 1 PT CPI's Rokan Operation Area by SKK Migas Deputy Finance and Monetization Parulian Sihotang, VP Supply Export Operation PT Pertamina (Persero) Agus Witjaksono, Expert ESDM Minister Sampe L. Purba and PGPA Senior VP PT. CPI Wahyu Budiarto.

Nicke Widyawati 

Separately, President Director of PT Pertamina (Persero) Nicke Widyawati explained that Pertamina would seek to absorb as much as possible the crude oil of the KKKS section to meet domestic refinery needs so as to reduce crude oil imports.

      Furthermore, Nicke added, since the issuance of the Minister of Energy and Mineral Resources Regulation No. 42 of 2018 at the beginning of September 2018, an agreement was reached between Pertamina and several KKKS, one of which was the first and the biggest was PT CPI.

PT Chevron Pacific Indonesia

Government policies that prioritize the use of domestically produced crude oil to be processed at domestic refineries are very important in an effort to meet national energy security.

"We thank PT CPI for achieving this agreement. B to B relations and cooperation between the two parties are expected getting tighter, "Nicke said.

With the purchase of crude oil from the Blok Rokan field, Pertamina will supply the needs of SLC and DC crude oil which will be processed at the Pertamina Refinery in addition to Kasim - Sorong.

"We refer to the Government's direction and have submitted a proposal expressing interest in all KKKS to buy their crude oil rations. Purchases are based on business-to-business principles, "said Nicke.

Meanwhile, PT Chevron Pacific Indonesia welcomed the collaboration with Pertamina. The Rokan Block is the largest crude oil producer in Indonesia and this cooperation framework provides benefits for all parties including the Government and the people of Indonesia.

"With this cooperation, we formally apply the regulation on the sale of crude oil to contractor parts for domestic needs," said President Director of PT Chevron Pacific Indonesia Albert Simanjuntak.

So far, the bulk of the part of the Cooperation Contract Contractors (KKKS) such as PT CPI is mostly exported, while on the other hand Pertamina still has to import crude oil and condensate around 342,000 barrels per day. With the issuance of Minister of Energy and Mineral Resources Regulation No. 42 of 2018, the crude oil of the KKKS part is prioritized to be sold to Pertamina and processed at domestic oil refineries.

The crude oil is Sumatran Light Crude (SLC) and Duri Crude (DC) produced by the Rokan Block, according to Pertamina's oil refinery configuration, so that it can increase the yield of valuable products at Pertamina's refineries. 

     The crude oil purchase agreement also received attention from the ESDM Ministry. The ESDM Ministry's Director General of Oil and Gas (Oil and Gas) Djoko Siswanto hopes that this collaboration can be developed by Pertamina and other KKKS.

"This is a big example, that the production of the Rokan block as the biggest oil producer in Indonesia, can be increased the use of oil to be processed in domestic refineries. This makes our Energy security even better, "Djoko said.

SKK Migas also welcomed the purchase of PT CPI crude oil from the Rokan Block by Pertamina. In addition to running the Regulation of the Minister of Energy and Mineral Resources 42 of 2018, prioritizing the fulfillment of domestic needs by Pertamina is something that strengthens the implementation of the Domestic Market Obligation that has been applied to Indonesia's upstream oil and gas industry.

Dwi Soetjipto

SKK Migas Head Dwi Soetjipto explained, amid increasing domestic oil consumption, SKK Migas will continue to encourage Pertamina's efforts to reduce imports by purchasing crude oil produced from Indonesia's own oil fields, which are operated by the KKKS.

Blogger Agus Purnomo in SKK Migas

"The use of crude oil from the results of the fields in Indonesia is a good step to reduce crude oil imports so that it can improve the current trade balance. It is expected that the other KKKS will follow this step, sell their share of crude oil to Pertamina, while still prioritizing good business-to-business principles while continuing to optimize state revenues, "Dwi said.

Since the enactment of the Regulation of the Minister of Energy and Mineral Resources No. 42 of 2018 concerning the Priority of Petroleum Utilization to Fulfill Domestic Needs which came into force on September 5, 2018, in addition to PT CPI, Pertamina has also made agreements with other KKKS such as; RH Petrogas Limited, PT SPR Langgak, PetroChina International Jabung Ltd, PT Bumi Siak Pusako, SAKA Pangkah Indonesia Ltd, PT Energi Mega Persada Tonga, Petronas Carigali Ketapang I Ltd, Husky CNOOC Madura Ltd (HCML), and PT Energi Mega Persada Tbk.

Husky CNOOC Madura Ltd (HCML)

All of these efforts can reduce imports of crude oil and condensate by around 115,000 barrels per day and are expected to reduce import purchases to 250,000 barrels per day.

IN INDONESIAN

Minyak Mentah Blok Rokan Mulai Diolah di Kilang Pertamina

PT Pertamina (Persero) melaksanakan lifting perdana minyak mentah (crude oib bagian PT Chevron Pacific Indonesia (PT CP) di Blok Rokan, yang akan diolah di kilang minyak dalam negeri milik Pertarmina. Dalam tahap awal, untuk periode Januari hingga Juni 2019, estimasi volumenya diperkirakan mencapai 2,5 juta barel per bulan.

Lifting perdana, menurut siaran pers yang diterima Investor Daily, diresmikan dengan simbolis penekanan tombol lifting di Pelabuhan Wharf 1 Area Operasi Rokan PT CPI oleh Deputi Keuangan dan Monetisasi SKK Migas Parulian Sihotang, VP Supply Export Operation PT Pertamina (Persero) Agus Witjaksono, Tenaga Ahli Menteri ESDM Sampe L. Purba dan Senior VP PGPA PT. CPI Wahyu Budiarto.

Di tempat terpisah, Direktur Utama PT Pertamina (Persero) Nicke Widyawati menjelaskan bahwa Pertamina akan mengupayakan menyerap semaksimal mungkin minyak mentah bagian KKKS untuk memenuhi kebutuhan kilang dalam negeri sehingga dapat mengurangi impor minyak mentah. 

     Lebih lanjut Nicke menambahkan, sejak terbitnya Peraturan Menteri ESDM Nomor 42 Tahun 2018 pada awal September 2018, telah tercapai kesepakatan antara Pertamina dengan beberapa KKKS, salah satunya yang pertama dan terbesar adalah PT CPI. 

Kebijakan Pemerintah yang memprioritaskan penggunaan minyak mentah yang dihasilkan di dalam negeri untuk diolah di kilang dalam negeri sangat penting sebagai upaya untuk memenuhi ketahanan energi nasional.

“Kami mengucapkan terima kasih kepada PT CPI atas tercapainya kesepakatan ini. Hubungan dan kerjasama B to B antar kedua belah pihak diharapkan semakin erat,” ujar Nicke.

Dengan pembelian minyak mentah dari lapangan Blok Rokan ini, Pertamina akan memasok kebutuhan minyak mentah SLC dan DC yang akan diolah di Kilang Pertamina selain Kasim - Sorong.

“Kami mengacu pada arahan Pemerintah dan telah menyampaikan proposal menyatakan minat kepada seluruh KKKS untuk membeli jatah minyak mentah

mereka. Pembelian dilakukan berdasarkan prinsip business to business,” ungkap Nicke.

Sementara itu, PT Chevron Pacific Indonesia menyambut baik kerjasama dengan Pertamina. Blok Rokan merupakan produsen minyak, mentah terbesar di Indonesia dan kerangka kerjasama ini memberikan manfaat bagi semua pihak termasuk Pemerintah dan rakyat Indonesia.

“Dengan adanya kerja sama ini maka kami secara resmi menerapkan peraturan penjualan minyak mentah bagian kontraktor untuk kebutuhan domestik,” kata Presiden Direktur PT Chevron Pacific Indonesia Albert Simanjuntak.

Selama ini, minyak mentah bagian Kontraktor Kontrak Kerja Sama (KKKS) seperti PT CPI sebagian besar diekspor, sementara di sisi lain Pertamina masih harus mengimpor minyak mentah ,dan kondensat sekitar 342.000 barrel per hari. Dengan terbitnya Peraturan Menteri ESDM Nomor 42 T ahun 2018, maka minyak mentah bagian KKKS diprioritaskan untuk dijual ke Pertamina dan diolah di kilang minyak dalam negeri.

Minyak mentah jenis Sumatran Light Crude (SLC) dan Duri Crude (DC) yang dihasikan oleh Blok Rokan, sesuai dengan konfigurasi kilang minyak Pertamina, sehingga dapat meningkatkan yield of valuable products di kilang Pertamina. Kesepakatan pembelian minyak mentah ini juga mendapat perhatian dari Kementerian ESDM. 

     Direktur Jenderal Minyak dan Gas Bumi (Migas) Kementerian ESDM Djoko Siswanto berharap kerjasama ini dapat dikembangkan Pertamina dengan KKKS lainnya.

“Ini menjadi contoh besar, bahwa produksi dari blok Rokan sebagai penghasil minyak terbesar di Indonesia, bisa ditingkatkan pemanfaatan minyaknya

untuk diolah di kilang dalam negeri. Ini membuat ketahanan Energi kita semakin baik,” kata Djoko.

SKK Migas pun menyambut baik adanya pembelian minyak mentah crude PT CPI dari Blok Rokan oleh Pertamina. Selain menjalankan Perarturan Menteri ESDM 42 Tahun 2018, yakni pengutamaan pemenuhan kebutuhan dalam negeri oleh Pertamina merupakan hal yang memperkuat implementasi Domestic Market Obligation yang selama ini sudah diterapkan pada industri hulu migas Indonesia.

Kepala SKK Migas Dwi Soetjipto menjelaskan, di tengah semakin meningkatnya konsumsi minyak dalam negeri, SKK Migas akan terus mendorong upaya Pertamina untuk mengurangi import dengan melakukan pembelian minyak mentah yang diproduksi dari lapangan-lapangan minyak Indonesia sendiri, yang di operasikan oleh KKKS.

“Pemanfaatan minyak mentah dari hasil lapangan-lapangan di Indonesia, merupakan langkah yang bagus untuk dapat menurunkan impor minyak mentah, sehingga dapat memperbaiki neraca perdagangan berjalan. 

   Diharapkan KKKS yang lain akan mengikuti langkah ini, menjual minyak mentah bagiannya ke Pertamina, dengan tetap mengedepankan prinsip business-to-business yang baik, serta tetap mengoptimalkan penerimaan negara,” ungkap Dwi.

Sejak berlakunya Perarturan Menteri ESDM Nomor 42 Tahun 2018 Tentang Prioritas Pemanfaatan Minyak Bumi Untuk Pemenuhan Kebutuhan Dalam Negeri yang mulai berlaku pada 5 September 2018, selain dengan PT CPI, Pertamina juga telah, melakukan kesepakatan dengan KKKS lainnya seperti ; RH Petrogas Limited, PT SPR Langgak, PetroChina International Jabung Ltd, PT Bumi Siak Pusako, SAKA Pangkah Indonesia Ltd, PT Energi Mega Persada Tonga, Petronas Carigali Ketapang I Ltd, Husky CNOOC Madura Ltd dan PT Energi Mega Persada Tbk.

Seluruh upaya ini dapat mengurangi import minyak mentah dan kondensat sekitar 115.000 barrel per hari dan diharapkan dapat mengurangi pembelian impor menjadi 250.000 barel per hari.

Kontan, Page-14, Wednesday, Jan 16, 2019

PEP Performs JTB Gas Development

PT Pertamina EP Cepu (PEPC) conducted the inauguration of the inaugural EPC Gas Processing Facilitation / GPF project for the development of the Jambaran - Tiung Biru unitization gas field in Bojonegoro Regency.

PT Pertamina EP Cepu (PEPC)

Upstream Director of Pertamina Dharmawan Samsu said that the inaugural erection of the EPC Gas Processing Facility was one of the important momentum of the JTB unitization gas field development project.

Jambaran Tiung Biru Gas Field

"The GPF EPC project functions to produce gas and condensate from the Jambaran-Tiung Biru Unitization Field with an average raw gas production of 315 MMSCFD and onstream/commercial gas targets in 2021 with gas sales of 192 MMSCFD," he said.

According to him, the GPF will be built using technology and is designed to get operational reliability and be environmentally friendly to produce for 25 years. PEPC President Director Jamsaton Nababan explained that currently, the EPC GPF progress has reached 12 percent. It is expected that progress will progress further in accordance with the "S-Curve" agreed upon between PEPC and the RJJ consortium as the executor of the work.

"This work is carried out in parallel and simultaneously from the engineering, procurement, and construction work so that the Commissioning and Project Completion EPC GPF can be implemented in 2021," Jamsaton added.

Gas production of 192 MMSCFD will be channeled through the Gresik-Semarang transmission pipeline. With JTB gas reserves of 2.5 trillion cubic feet (TCF), JTB is expected to provide a multiplier effect, especially to overcome the gas supply deficit in Central and East Java.

On that occasion, Chairman of the Bojonegoro Regional People's Representative Council (DPRD) Sigit Kusharijanto expressed his support for the JTB project which can provide a multiplier effect and the implementation of a CSR program that has been ongoing for the Bojonegoro community. 

Blogger Agus Purnomo in SKK Migas

    SKK Migas Deputy Operation Fatar Yani Abdurrahman added that the JTB project was a large project full of challenges and also part of the National Strategic Project.

"We really appreciate PEPC and the RH Consortium, good cooperation, and high professionalism is needed so that the project will be carried out according to plan," he said.

PT Pertamina (Persero) is optimistic that PEPC, which has previously supported 25 percent of national crude oil production through the Banyu Urip Field, will show its commitment to guarding the JTB project so that it is finished on target. The JTB project is projected to increase state revenues from USD 3.61 billion during production sharing contracts (PSC).

Harian Bangsa, Page-4, Saturday, Jan 5, 2019

Termination Block Increases Pertamina's Production by 5%

The management of two 2018 termination oil and gas blocks to PT Pertamina Hulu Indonesia provides additional oil and gas production of 5% to PT Pertamina (Persero). The two oil and gas blocks are Sanga-Sanga and East Kalimantan-Attaka. 

    Bambang Manumayoso, Managing Director of Pertamina Upstream Indonesia, said that the company manages three termination oil and gas blocks, namely the Mahakam, Sanga-Sanga, and East Kalimantan-Attaka Blocks.

the Mahakam block

The production of the Sanga-Sanga and East Kalimantan-Attaka Blocks is relatively different. Of the two 2018 termination blocks, it is optimistic to obtain an additional 5% production.

Attaka Blocks

"So it is indeed not significant in the context of national oil and gas production. But for Pertamina, there is additional production of 5%, "Bambang said in Balikpapan.

Referring to Pertamina's data, until the end of last July, the Sanga-Sanga Block was recorded as producing 10,753 barrels per day (BPD) of oil and 80.7 million standard cubic feet per day/Mmscfd of gas. Meanwhile, Blok East Kalimantan-Attaka produced 13,220 BPD of oil and 69.44 mmscfd of gas per September.

Bambang continued, his party would continue to boost the termination block production through the discovery of new oil and gas potential. Therefore, It is committed to conducting exploration in this termination block. Bambang is optimistic, with the development of oil and gas technology, reserves will be found new in this area. Moreover, the three Working Areas they manage are in one area.

"This is a very large delta system and we examine the potential around it," he said.

It takes at least 1-2 years to study new exploration potentials. This is reflected in the definite work commitment promised by Pertamina. Referring to the Decree of the Minister of Energy and Mineral Resources (ESDM) No 1793K / 12 / MEM / 2018, in Sanga-Sanga, Pertamina promised to drill 4 exploration wells worth the US $ 20 million and a G & G study of US $ 500 thousand. At East Kalimantan-Attaka, the company is committed to drilling 1 exploration well worth US $ 30 million and an exploration study of US $. 250 thousand.

"It is expected that the study and exploration package will be able to add new potential reserves," Bambang said.

The Sanga Sanga block is estimated to still have a cumulative estimate of production of 258 million barrels of oil equivalent. The Sanga-Sanga work area has seven fields, namely Rhinos, Rice, Lampake, Patchouli, Mutiara, Pamaguan, and Semberah. While the East Kalimantan-Attaka Block is estimated to have a cumulative oil production of 1 billion barrels and gas of 3 trillion cubic feet.

This block has 15 fields, namely Attaka, Melangin, Kerindingan, Serang, Sapi, Santan, Sepinggan, Sedandang, Seguni, Sejadi, Yakin, Mahoni, Bangkirai, Seturian, and Beaches. 

Blogger Agus Purnomo in SKK Migas

    Previously, Amien Sunaryadi, Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), revealed that with the management of termination blocks, the increase in Pertamina's oil and gas production alone is not enough.

The reason is, if Indonesia wants no longer needs to import crude oil or fuel oil (BBM), domestic oil production must increase by the current import of around 1.3 million barrels per day.

"If you want to go up that much, you need to have at least five Banyu Urip Fields. That is, giant discoveries, not just one, "he asserted.

For this reason, his party hopes that Pertamina will also try to find a large enough oil and gas reserve. Furthermore, Bambang said, the management of the two oil and gas blocks would involve the participation of the regional government. The amount of participation rights (participating interest / PI) of the regional government has been determined by the central government at 10%. At present, the 10% PI is still being discussed together with SKK Migas.

According to data from the Ministry of Energy and Mineral Resources (ESDM), since 2017, Pertamina has been granted 100% management and ownership rights for 13 terminations of oil and gas blocks from 2017-2021. In detail, Blok Offshore North West Java (ONWJ), Mahakam, Central, Attaka, East Kalimantan, North Sumatra Offshore (NSO), Sanga-Sanga, SES, Tuban, Ogan Komering, and Rokan.

the Rokan Block by Chevron

With the ownership of 12 terminated oil and gas blocks, without Blok Rokan, Pertamina is projected to gradually control 39 percent of national oil and gas production starting next year. At present, the national oil and gas production is recorded at around 2 million barrels of oil equivalent per barrel (boepd). This means that Pertamina's role in maintaining national oil and gas production will be even greater.

Investor Daily, Page-10, Tuesday, Oct 30, 2018

Contractor Oil Purchases Hampered by Tax

The efforts of PT Pertamina (Persero) to buy crude oil as part of the contract of the cooperation contract are still constrained by the existence of income tax on profit after tax or branch profit tax. 

    Director-General of Oil and Gas, Ministry of Energy and Mineral Resources Djoko Siswanto said, contractors who sell crude oil to Pertamina are subject to 44% tax. If the oil portion of the contractor is sold abroad, the tax levy is relatively smaller.

According to him, the problem was known during a discussion involving contractors in SKK Migas. At present, the sale of crude oil to domestic buyers has been exempted from Article 22 of Income Tax (PPh 22). However, the model of oil sales abroad that uses the Indonesian price scheme Crude price / ICP plus becomes a problem in the country.

Blogger Agus Purnomo in SKK Migas

"The time to sell crude oil in Singapore is subject to a tax of about a dozen percent, well if the country is taxed at 44%. Too big right? If large, it will be burdensome for paying taxes, "he said.

In the Income Tax Act, Article 26 states that income tax is imposed on income received by foreign and Indonesian taxpayers other than permanent establishment (BUT) in Indonesia. Levies are taken on tax profits obtained by a permanent business entity subject to additional income tax on profit after tax obtained by BUT at 20% or according to the applicable tariff in the tax agreement.

According to him, the contractor oil portion that Pertamina bought was not taxed. The reason is, when the contract of cooperation contracts sells oil through a subsidiary that becomes its affiliate (trading arm), the contractor is not subject to Article 26 income tax. 

    If this policy is not changed and the Contractor Partnership Contract (KKKS) will still be taxed, Djoko suggests that the  Income Tax (PPh 22) levy should be included in the selling price of the oil. Furthermore, Pertamina will pay the tax to the government.

Djoko explained, when the Directorate General of Taxes did not get income from transactions through the trading arm, there should be no questionable levy on sales to Pertamina. So far three oil and gas contractors have agreed on the selling price of crude oil with Pertamina. The three contractors include PT Energi Mega Persada and Premier Oil.

Bisnis Indonesia, Page-24, Monday, Oct 1, 2018

PGN is a very big seller of LNG blocks

PT Perusahaan Gas Negara Tbk (PGN) is designated as the uncommitted LNG liquefied natural gas producer of the PT Badak NGL LNG plant with the Sanga-Sanga Block. PGN becomes an LNG seller only for 2018 only.

This is in accordance with the decision letter of the Special Unit for Upstream Oil and Gas Business Unit (SKK Migas) signed by Head of SKK Migas Amien Sunaryadi on 4 December.

Blogger Agus Purnomo in SKK Migas

Referring to this letter, PGN initially applied to become an LNG seller of the state. Furthermore, there was a meeting which discussed the plan and the delivery of the uncomitted cargo sales strategy from Sanga-Sanga by PGN.

Secretary General and Executor of Duty Director General of Oil and Gas Ministry of Energy and Mineral Resources (ESDM) Ego Syahrial confirmed the decision of appointment of PGN as the seller of LNG. According to him, this decision was taken to open up opportunities for PGN.

"We grant, as long as we can give the best yield for the country, we are open. PGN is one in this field, yes we give it a chance, "he said in Jakarta.

The Letter of SKK of the Oil and Gas appoints PGN as the seller of uncommitted LNG volume of state parts produced from Badak LNG Plant with gas source from Sanga-Sanga Region. In this case, PGN is in charge of carrying out LNG buying and selling with prospective buyers for the period of 2018 subject to the determination of LNG allocations and prices from the Minister of EMR

Furthermore, PGN as an LNG seller may initiate the execution of negotiations, discussions, and/or discussions with potential LNG buyers without creating non-binding documents/agreements. In this regard, LNG sellers should always coordinate and submit reports to SKK Migas.

As an LNG seller, PGN has a number of tasks, ranging from submitting a written approval request on sales mechanisms to be used before marketing, preparing and obtaining approval of the sale and purchase agreement and/or other documents, to reporting the proceeds of each sale.

PGN as an LNG seller is also responsible for firstly assuming all costs and/or liabilities incurred, as well as payment obligations resulting from or in connection with the implementation and/or fulfillment of obligations under the LNG purchase agreement or other related agreements (fees and liabilities). Costs and responsibilities will be treated as operating expenses.

As an LNG seller, PGN will not be rewarded. Previously, all LNG produced by Badak LNG Plant was assigned its sales to Pertamina, from any source of gas. Talked about the potential conflict between Pertamina and PGN regarding this new decision, Ego is optimistic the two government companies will eventually reach an agreement.

The Badak NGL LNG refinery processes gas supplies from several oil and gas projects, namely Mahakam Block, Bangka Field, Jangkrik Field, and includes the Sanga-Sanga Block.

For 2017, LNG production from refineries operating since 1977, according to its official website was recorded at 7.84 million tons with shipments of 140.44 cargo standards.

Assets acquisition

Previously, Pertamina also transferred the assets of the LNG plant in Bontang to Badak NGL. According to Vice Minister of EMR Arcandra Tahar this is due to the change of refinery operators. So far, the government has appointed Pertamina as the refinery operator, which furthermore the company appointed LNG Badak.

"Now that distinguishes, Pertamina does not enter again as an operator. Badak NGL as an operator, "he said.

LNG refinery assets in Bontang, East Kalimantan are state-owned through the State Asset Management Institute (LMAN). However, LMAN can not be a refinery operator, so it is assigned to the NGL Badak. Asset transfer from Pertamina to Badak NGL began on 1 January 2018.

PT Badak NGL is owned by gas producers in East Kalimantan. In detail, Pertamina holds majority ownership of 55%, then Vico 20%, Japan Indonesia LNG Company (Jilco) 15%, and Total Indonesia 10%. Stock ownership has not changed with the asset transfer.

LNG production from Bontang LNG Plant continues to fall every year. In 2015, this refinery LNG production could reach 189 cargoes. However, the production figure dropped to 172 cargoes by 2016 and is expected to fall back to 163 cargoes this year.

Investor Daily, Page-9, Monday, Dec 11, 2017

ESDM Auditing of Inpex Funds US $ 1.6 M

A letter from the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) was sent to the editor of KONTAN. The letter numbered SRT-0138/SKKMA0000/2017/SO is related to the development of Abadi Field, Masela Block.

Blogger Agus Purnomo In SKK Migas

 The SKK Migas letter was addressed to Inpex Masela Ltd. dated 22 May 2017. In the letter, the government agreed to all Inpex's wishes in developing the Masela Block. The Ministry of Energy and Mineral Resources (ESDM) confirmed the letter. ESDM admits that the government is encouraging Inpex to immediately conduct a preliminary design study of the Abadi Field, Masela.

Abadi Field, Masela Block.

There are five important points in the letter. First, the government is willing to replace US$ 1.6 billion in cost recovery. Second, SKK Migas approved a production capacity of 9.5 million tons of liquefied natural gas (LNG) per year and pipe gas of 150 mmscfd.

Blogger Agus Purnomo In SKK Migas

 Third, Inpex received a seven-year change of time, from the contract expiring in 2028 to 2035. This is because since 1998 the policies in the Masela project have often changed. Fourth, SKK Migas will discuss the addition of the Masela contract for a period of two to 10 years. Fifth, the location of the onshore LNG plant around Yamdena Island, West Saumlaki, East Saumlaki, and Kore on Selaru Island.

 Arcandra Tahar, Deputy Minister of Energy and Mineral Resources confirmed that SKK Migas' letter to lnpex is being audited, including approval of a refund of approximately US$1.6 billion to Inpex Masela Ltd.

"It doesn't necessarily mean that the letter given is approved, but it will be audited first," said Arcandra.

 The replacement of US$ 1.6 billion is not in the form of cash, but cost recovery when the Abadi Field is already in production. According to the contract, Masela Block will continue to use cost recovery profit-sharing instead of a gross split.

 Meanwhile, Fahmi Radhi, an Energy Observer from Gadjah Mada University, said that the state should not spend US$ 1.6 billion for Inpex Masela Ltd. as compensation for the presidential decision to move the refinery from onshore to offshore.

"Reimbursement of that amount does not guarantee that the Masela Block will start operating immediately. Inpex Masela Ltd. still needs to recalculate for offshore operations," he added.

Unfortunately, Amien Sunaryadi, the Head of SKK Migas, did not answer KONTAN's confirmation about the replacement of the funds.

 Deputy for Procurement Control of SKK Migas, Djoko Siswanto, only answered briefly. "Sorry I don't deal with that anymore," he said.

 Inpex Corporation Senior Communication Manager Usman Slamet also did not answer the question of the change in funds. The government targets that within three months there will be gas buyers for the Masela Block.

"We prioritize domestic first," said Arcandra, Sunday (30/7).

 Now, the government is waiting for lnpex and Shell to do a pre-Front End Engineering Design (feed).

"The SKK Migas letter is ready, they should start working," said Arcandra.

The Masela Block is managed by PT Inpex Masela Ltd.(65%) and Shell Upstream Overseas Services Ltd (35%).

Kontan, Page-14, Monday, July 31, 2017

Increased Production of Cepu Block Hampered by Permits

The company claims the change of operations is accepted by the public.

Cepu Block Manager in East Java, ExxonMobil Oil Indonesia, is awaiting government approval for the revision of the Environmental Impact Assessment (Amdal/EIA) document Banyu Urip Field. Approval is needed to increase commercial oil production. "While waiting for our first test of production. We hope as soon as possible, "said Vice President of Public and Government Affairs ExxonMobil, Erwin Maryoto

ExxonMobil wants to increase production from 185 thousand Barrels Per Day (BPD) last year to 200 thousand bpd. Erwin assured the addition of production does not damage the environment. ExxonMobil submitted an EIA revision late last year. However, until now, there has been no decision.

According to Erwin, the socialization of the EIA revision has been approved by the Bojonegoro community, the village head, and self-help organizations. Reportedly just waiting for finalization. People welcome speech positively.

The company also needs to rearrange the management of oil ready for sale (lifting). Changes are needed in line with plans for increased lifting activities, including replacing vessels with larger ones.

the Banyu Urip Field

Previously, ExxonMobil held a trial on increasing the Banyu Urip Field production at 46 wells site. A total of 30 wells were tested to increase production. The rest is drilled to maintain the balance of oil suction. As a result, production increases are still possible. Additional oil production costs are estimated at only US $ 2.4 per barrel. The value is cheaper than the average development cost of US $ 4.5 per barrel.

The company recorded oil content in Banyu Urip Field at 729 million barrels. ExxonMobil seeks to increase the proven reserves of Cepu Block through exploration at Kedung Keris Field.

Based on preliminary testing, the field is capable of producing up to 5,000 bpd of oil. Cepu Block becomes one of the backbones of the fulfillment of the national ready-to-sell oil production target next year to 825 thousand bpd. That figure is higher than the assumption of the 2017 State Budget of 2017 which is 815 thousand bpd.

Lifting will also be sustained from the production of key work areas such as the Rokan Block (Riau) managed by Chevron Pacific Indonesia of 228 thousand bpd and Pertamina EP (all over Indonesia) 84 thousand bpd.

Blogger Agus Purnomo in SKK Migas

Special Unit for Upstream Oil and Gas Upstream Activities is optimistic that this year's lifting can exceed the target of APBN. Head of SKK Migas Amien Sunaryadi explained that next year's production activities will include development drilling in 223 wells, re-working activities of 860 wells, as well as maintenance of 57,512 wells. 

    In addition, 2D seismic surveys will be conducted on a 3.080 square kilometer land, a 2,795 square kilometer 3D seismic survey, and exploration drilling at 25 wells. The 2017 challenge is added. It is still less than 17 thousand barrels per day, "said Amien.

Koran Tempo, Page-21, Wednesday, May 31, 2017

Pertamina EP Boost Search New Oil and Gas Reserves

  

     The subsidiary of PT Pertamina, PT Pertamina EP, which is also a Contract of Work Contractor (KKKS) under the auspices of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) has made another achievement.

Blogger Agus Purnomo in SKK Migas 

    The commitment shown by this Pertamina subsidiary to find new oil and gas reserves through exploration activities received the best performance award this year from SKK Migas. We are committed to finding and finding oil and gas reserves to support Indonesia's energy security.

     And we are grateful to receive an award from SKK Migas for the category of Best Land Survey, Best Exploration Drilling, and 2nd Place for Best Exploitation Drilling, "said Exploration and New Discovery Project Director of PT Pertamina EP Nanang Abdul Manaf.

    Nanang emphasized that Pertamina EP will remain aggressive in seeking and finding oil and gas reserves because the discovery of exploration reserves guarantees energy security for the next few years.

    According to him, the essence of the upstream oil and gas business is the availability of oil and gas reserves which are then exploited so that the benefits can be felt for the community. Therefore, we will continue to increase exploration activities to areas that have not been explored and have oil and gas potential, as we did in Eastern Indonesia, specifically in Bintuni and other places, "said Nanang.

    Nanang said, this year's target for 3D land (Seismic) survey activities covering an area of ​​785 square kilometers (km). Pertamina EP, according to him, was able to realize up to 951 square kilometers or 121 percent above the target. The 2016 2D Seismic target is 941 km long, and Pertamina EP has succeeded in achieving 953 km or 101 percent above the target. Regarding exploration activities, the target for 2016 is to drill eight exploration wells.

    As of December 2016, five wells had been completed or 63 percent of the target and one well was in the preparation stage for rig installation. Previously, Pertamina EP and PT Sarana GSS Trembul signed an operational cooperation agreement (KSO) for the Trembul Operation Area. The first three-year work program was valued at US $ 7.6 million, with the funds being used for drilling four wells and seismic acquisition activities.

    President Director of GSS Facility Trembul Bambang Mulyadi said the first well (SGT-01) is planned to start drilling in June 2017 and start production in August 2017. He added that Pertamina EP has the exclusive right to carry out oil and gas operations in the Trembul Operation Area from BP Migas ( now SKK Migas) based on Presidential Regulation Number 9 of 2013.

    Furthermore, Pertamina EP appointed PT Sarana Pembangunan Jawa Tengah (BUMD owned by the Regional Government of Central Java) as the partner of choice to carry out oil and gas operations in the region, to carry out operations, PT Sarana Pembangunan Jawa Tengah conducted a joint venture with GSS Energy Limited through a joint venture company PT Sarana GSS Trembul.

    The Trembul Oil and Gas Operation Area is located in Talokwohmojo Village, Ngawen District, Blora Regency, Central Java Province. The operating area covers 47.61 km2 which is located 15 km on the west side of Blora City. In the Trembul Operation Area, there are 24 wells drilled and exploited by NKPM. However, the area was closed in 1942, following the Japanese invasion in World War II. The Trembul area is estimated to have oil reserves of 40.1 million barrels. During 1917-1942, NKPM only took 307 thousand barrels, so there were still plenty of oil reserves left.

Republika, Page-14, Friday, Dec 16,2016