WORKING TO MAINTAIN THE PRODUCTION OF THE CEPU BLOCK

    The cooperation contract contractor who holds the participation right in the Cepu Working Area is racking his brain to reduce the rate of natural production decline in the block which accounts for about 30% of the national oil.

PT Pertamina EP Cepu (PEPC)

    Meanwhile, the participating shareholders in the Cepu Block are divided into seven companies, namely PT Pertamina EP Cepu (PEPC) with a 45% share, ExxonMobil Cepu Ltd (EMCL) 20.5%, 

ExxonMobil Cepu Ltd (EMCL)

    Ampolex. (Cepu) Pte. Ltd. 24.5%, PT Sarana Patra Hulu Cepu 1.09%, PT Asri Dharma Sejahtera 4.48%, PT Blora Patragas Hulu 2.18%, and PT Petrogras Jatim Utama Cendana 2.24%.

    President Director of Pertamina EP Cepu Awang Lazuardi said that in connection with the potential decline in production after reaching the peak period this year, his party will coordinate intensively with a number of partners. According to him, Pertamina EP Cepu will actively communicate with ExxonMobil Cepu as the operator of the Banyu Urip and Kedung Keris fields, as well as other participating rights holders.

PT Pertamina Hulu Energi (PHE)

    In addition, together with PT Pertamina Hulu Energi (PHE) as the company's sub-holding and the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), his party will compile further strategic steps. Meanwhile, a number of work plans that are being and will continue to be carried out include maintaining reservoir pressure, well intervention/services, and preventive maintenance.

Blogger Agus Purnomo in SKK Migas

"Coordination with EMCL [Exxonmobil], our partners, and SKK Migas will continue to be carried out in compiling a work plan and execution," he said.

    Previously, Exxonmobil was exploring all options to optimize production in the Cepu Block, which has entered its peak period. Azi N. Alam, Vice President of Public and Government Affairs of ExxonMobil Indonesia, said that the company continues to explore various options to optimize the production of the Cepu Block safely and reliably.

"As the backbone of national oil production, we hope to produce more than double the initial expectations," he said.

    Based on the results of Exxonmobil's technical study, Azi explained that the recoverable reserve of the Banyu Urip Field has more than doubled from the initial plan of development (PoD) of 450 million barrels of oil to 940 million barrels of oil. According to Banyu Urip's PoD, the peak production period is estimated to be around 2 years with an average annual production of 165,000 barrels of oil per day. However, since the full facility start-up, ExxonMobil has been producing up to 225,000 barrels of oil per day for about 5 years.

    Production had increased by about 30% from the initial POD and peak production was 3 years longer than originally estimated. However, due to the natural characteristics of the reservoir, which is common throughout the world, ExxonMobil predicts Banyu Urip oil production will decline.

“Despite our continued efforts to optimize production, we have maintained outstanding safety and reliability performance as well cost-effective operation, "he explained.

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto said that the Cepu WK has a big role and contribution to the achievement of national oil and gas, including the production target of 1 million barrels of oil per day.

"The 2021 target for the Cepu Block working area will produce 219,860 barrels of oil per day and 55.16 MMscfd of gas," he said.

    Regarding the production target of 1 million barrels of oil per day, the government still needs to find an additional 350,000 barrels per day within 9 years. Member of Commission VII in the energy sector of the House of Representatives, Kardaya Warnika, said that the current condition in increasing domestic oil and gas production is the provision of incentives. The government is selling out incentives to contractors to spur exploration activities which he calls suspended animation.

"Given any incentives, but the legal certainty is not yet, investors are still in doubt," he said.

    Oil and gas practitioner Widyawan Prawira Atmaja said that the revision of the Oil and Gas Law, which has stopped for almost 9 years, is now crucial. He also urged Commission VII on the energy sector of the House of Representatives to immediately finalize the law to improve the domestic oil and gas investment climate. Energy Watch Executive Director Mamit Setiawan assessed that to achieve this vision one of the biggest obstacles is legal certainty.

    According to him, the certainty of new regulations is one of the key investments expected by oil and gas investors. In addition, the form of SKK Migas which is only issued through a Presidential Regulation is considered to provide uncertainty to investors.

SANGATTA OIL FIELD

    In another development, PT Pertamina EP Asset 5 Sangatta Field recorded oil production of 415 barrels per day from the ST-200 well. The record has tripled compared to production in December 2020.

    Hanif Setiawan, Sangatta Field Manager, said that the increase in production was an effort made between Pertamina EP Sangatta, Pertamina Drilling Service Indonesia, and the local government.

"The success of the ST-200 is proof that by synergizing between lines and running an unusual business operation by adapting to a pandemic situation, not only does it provide additional oil and gas production, but more than that, safety and health are maintained," he said.

    Drilling of the ST-200 well located in Sangatta Selatan Village, Sangatta Selatan District, East Kutai Regency, is carried out to a final depth of 2,203 meters measured depth (mMD) or 2,076 meters true vertical depth (mTVD). Pertamina EP, through the PEP Asset 5 operating unit, will drill 50 development wells and carry out the work of the Wells work plan for 2021.

    For Sangatta Block, 18 development wells will be drilled and five well work plans will be carried out. This activity is expected to contribute to efforts to produce 1 million barrels of oil per day and 12 billion standard cubic feet of gas per day by 2030. Based on the SKK Migas integrated operating system report on February 4, 2021, on a year-to-date basis, PEP Asset 5 is able to record Crude oil production from Kalimantan is 16,172 barrels per day.

    Meanwhile, for gas, production is around 15.44 MMscfd. This production is supported by five oil and gas fields, namely Sangatta and Sangasanga (East Kalimantan), Tarakan and Bunyu (North Kalimantan), and Tanjung (South Kalimantan and Central Kalimantan).

"For Sangatta Field, during 2020, oil lifting recorded as much as 696,065 barrels or 101% of the target. Production was recorded at 682,734 barrels or 110% of the target, "said Hanif.

Bisnis Indonesia, Page-19, Tuesday, Feb 9, 2021

Additional Key Incentives to Reach the Target of 1 Million BPD

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the success of achieving the target of 1 million barrels per day (BPD) in 2030 depends on additional incentives from the government. 

Blogger Agus Purnomo in SKK Migas

    Without additional incentives, oil production will only be around 500 thousand BPD in 2030.

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto said, referring to Wood Mackenzie, Indonesia's oil and gas prospectivity rating is still very good, although a bit low. However, based on IHS Markit's research, the country's risk rating and the national fiscal system are considered to continue to decline from year to year. With the potential for oil and gas, this fiscal improvement is the key for Indonesia to work on its oil and gas prospects. Moreover, oil production has continued to decline over the last 20 years.

"So far, it is known that we have 128 basins and only 20 basins are producing. "This should be our concern whether we will just accept the decline," he said in a meeting with Commission VII on the energy sector of the House of Representatives.

    He explained, according to the projections prepared by his party, oil production could be increased to 1 million BPD in 2030 if there were flexible and competitive incentives provided. On the other hand, without incentives, the projection results show that national oil production will only reach the range of 500 thousand BPD in 2030. The same thing he said applies to gas production, although the conditions are better. Without incentives, national gas production is relatively stable in the range of 6 billion standard cubic feet per day / BSCFD until 2030. However, if you want this gas production to increase, incentives are still needed.

"Providing flexible, competitive, and case-by-case incentives does not eliminate the obligation to seek massive potential, implement aggressive and efficient work programs, and run other enablers such as completing permits, land, and others," Dwi said.

    He added that the government is committed to improving the national oil and gas investment climate, including the provision of incentives for oil and gas companies. In fact, the meeting related to this matter was directly chaired by the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif.

"There are currently intense discussions led by the Minister of Energy and Mineral Resources about this incentive and how to make Indonesia's upstream oil and gas investment increase or have a strong appeal higher than other countries, "he said.

    So far, several improvements have been made to encourage oil and gas exploration. In detail, the availability of subsurface data, data openness, promotion of potential areas through roadshow investors and virtual data rooms which are still in preparation, as well as exploration funding from a firm work commitment (COW) of US $ 1.7 billion and the transfer of the remaining KKP for open area exploration.

    Meanwhile, to maintain the economy of the oil and gas project, Dwi revealed, there are several incentives that have been implemented. First, the elimination of Liquefied natural gas / LNG State Revenue Tax according to Government Regulation number 48 of 2020. Furthermore, the elimination of the cost of utilizing state property in accordance with the Minister of Finance Regulation number 140 of 2020.

"Then fiscal flexibility through investment incentives such as full price DMO, accelerated depreciation and split changes, so far have been given to the Mahakam Block, South Natuna Sea B, and Sanga-Sanga," he explained.

    Meanwhile, the incentives that are still under discussion are postponement or reduction of indirect taxes of up to 100%, elimination of costs for utilization of the Badak LNG Plant, tax holidays for income tax (PPh), assume and discharge, and tax allowances, as well as support for upstream oil and gas supporting industries.

Strong Planning

    Member of Commission VII in the energy sector of the Indonesian House of Representatives, Maman Abdurrahman, stated that Commission VII fully supports SKK Migas, which has set a production target of 1 million BPD in 2030. However, his party reminded SKK Migas to seriously work on this target. Moreover, in the last four years, the national oil production has not increased.

"Our national oil production greatly affects our macro assumptions. I am only one, I see a downward trend in production, that the planning team must really pay attention to. We don't want to be just lip service. So, the planning team must be strengthened, "he said.

    According to the Deputy Chairperson of Commission VII in the energy sector of the Indonesian House of Representatives Ramson Siagian, in the last three years, the realization of national oil production has always missed planned by SKK Migas. In view of this, he assesses that the target of 1 million BPD seems unrealistic. For that, planning at SKK Migas must be strengthened.

"This is like wishful thinking, unrealistic. I see a reliable Enhanced Oil Recovery, not new exploration, ”said Ramson.

    Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM), Tutuka Ariadji, previously said that a production target of 1 million BPD of oil and 12 BSCFD of gas is needed to ensure energy supply in the future. This target setting refers to national energy needs. Although at the same time the government is also encouraging the development of the electric vehicle ecosystem, this does not mean that the two targets are in conflict. Moreover, the transition to electric vehicles cannot occur significantly in a short period of time.

"Currently, our oil needs are around 1.6 million BPD, production 700 thousand BPD. We even produce up to 1 million BPD, still not a lot. Even electric cars cannot suddenly develop a large amount, "he said.

Investor Daily, Page-10, Monday, Feb 8, 2021

SKK Migas Records EOR Commitment of US $ 446 Million

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted a commitment to implementing Enhanced Oil Recovery (EOR) activities of up to the US $ 446 million. 

Blogger Agus Purnomo in SKK Migas

    EOR activities, especially in the Rokan Block, will support the achievement of the oil production target of 1 million barrels per day (BPD) by 2030.

    EOR is an advanced oil recovery method by adding energy in the form of special material or fluid that is not contained in an oil reservoir. Generally, EOR is applied to fields that have long been produced (mature fields) with the aim of extracting remaining oil that cannot be produced by primary and secondary recovery methods (water flooding).

    Some of the most widely known EOR techniques today are injection steam flooding, chemical flooding, and gas flooding. 

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto said the EOR activities to be carried out were water injection and chemical injection. To date, his party has recorded 23 EOR projects using polymers or surfactants which will operate until 2030.

"The firm work commitment (KKP) for EOR to date totals the US $ 466 million," he said.

    Of the 23 EOR projects, his party will focus on its implementation in the Rokan Block. 

the Rokan Block Chevron

    In blocks whose management will shift to Pertamina in August 2021, his party will re-evaluate the existing plan of development / POD and steam injection projects such as in North Duri Development (NDD) 14, Duri Ring, and others. In addition, his party will encourage the completion of Chemical EOR Phase-1 at Minas Field in early 2022.

"The Minas field is the main support for the EOR strategy with an additional production of around 52 thousand BPD in 2030," said Dwi.

    Regarding the progress of EOR implementation, 23 fields are still in the study stage. Meanwhile, one field is currently working on field trials and one field is being discussed on POD. Of the 23 EOR projects, most of them were Pertamina Group projects.

    In details, PT Pertamina Hulu Rokan (PHR) will carry out 7 EOR projects, PT Pertamina EP 2 projects, PT Pertamina Ogan Komering 2 projects, PT Pertamina Hulu Energi Noth West Java (ONWJ) 2 projects, PT Pertamina Hulu Offshore South East Sumatra (OSES) 2 projects , PT Pertamina Hulu Energi Siak 1 project, PT Pertamina Hulu Mahakam 1 project, and PT Pertamina Hulu Energi Tuban 1 project. In addition, BOB Bumi Siak Pusako will work on 1 EOR project, PT Energi Mega Persada (EMP) 1 project, Medco EP Indonesia 1 project, and 1 Petrogas project.

    Referring to SKK Migas data, the schedule for implementing one field (full field) for these EOR projects is Minas and Batang in 2024, Bekasap and E-main in 2025, Zulu in 2026, Tanjung, Rama, and Handil in 2027, Pedada, Sukowati, Gemah, Melibur, and Walio in 2028, Duri Ring, Bekasap, Kulin, Balam South, Bangko, and Kaji Harapan in 2029, as well as Air Serdang, Guruh, Krisna, and Mudi in 2030.

    Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM), Tutuka Ariadji, said that the application of EOR technology is not easy. In order for this EOR project to run smoothly in the long term, a strong research and development institution is needed to support it.

"Backing up research and development is absolute. If there are strong research and development, we can monitor oil and gas production. The oil and gas industry needs technology and competent people. There is no compromise on that, "he said.

    Meanwhile, Ronald Gunawan, Director of the Indonesia Petroleum Association (IPA), said that EOR activities are difficult to carry out under current conditions. This is because, with the current oil price conditions, the project is not economical when referring to the current fiscal scheme in Indonesia. If it is economical, oil and gas companies will certainly do it and boost oil production as much as possible.

Investor Daily, Page-9, Saturday, Feb 6, 2021

Pertamina Hulu Mahakam-Apexindo Signed US $ 68 Million Contract

 

PT Pertamina Hulu Mahakam (PHM) as the operator in the Mahakam Working Area (WA), with the support of SKK Migas and PT Pertamina Hulu Indonesia (PHI), announced the award of the Drilling Submersible Swamp Barge Services (Swamp Rig) contract to PT Apexindo Pratama Duta, Tbk, valued at the US $ 68 million.

Chalid Said Salim

    The signing of the swamp rig procurement contract was carried out online in Jakarta, on Thursday (4/2) by the Managing Director of PHI as the Proxy of the Managing Director of PHM Chalid Said Salim and the President Director of PT Apexindo Pratama Duta Tbk Zainal Abidinsyah Siregar. Also watching SKK Migas' Head of Goods and Services Procurement Management Division Erwin Suryadi, PHM General Manager Agus Amperianto, along with PHI and PHM management ranks.

Agus Amperianto

PHM General Manager, Agus Amperianto explained, Rig Yani will be brought to Mahakam Working Area to replace Rig Raisis in the second quarter of 2021 and support drilling operations in the Tambora, Tunu, and Handil fields. Agus hopes that Apexindo will take an active role in proposing efficiency programs.

"The development of various innovations for the optimization of operations will greatly support the Locomotive-8 program, for the continued production and development of the Mahakam Working Area," he said.

the Mahakam Work Area 

Through the Locomotive-8 program (Low Operation Cost of Mahakam to Achieve Effectiveness and Efficiencies - 8), PHM launched an integrated effort to optimize costs in all operating activities based on innovation and synergy, the goal is to maintain economics and sustainability in the Mahakam Working Area fields. who is already in the natural decline phase?

In his speech, Chalid Said Salim said that the signing of this contract is a form of Pertamina's commitment to maintaining production levels in the Mahakam Working Area.

"This signing is a manifestation of Pertamina's efforts to maintain national energy security, considering that this contract is an important part of oil and gas production activities at Mahakam Work Area," he said.

The contract value reaches US $ 68 million, has a duration of 1.5 years (with an option to extend 1 + 1 year), and has a commitment to the Domestic Content Level (TKDN) of 60.01%. 

    

Blogger Agus Purnomo in SKK Migas

    Head of the SKK Migas Goods and Services Procurement Management Division, Erwin Suryadi, said that SKK Migas welcomed the signing of this rig procurement contract.

"The signing of this contract shows PHM's determination to continue to maintain production levels in the Mahakam Working Area, this effort is also part of the efforts of SKK Migas and Cooperation Contract Contractors (KKKS) to achieve the production target of 1 million barrels of oil per day (BOPD) and gas. billion standard cubic feet per day (BSCFD) by 2030, "he said.

"To keep 2021 production from decreasing, SKK Migas and KKKS will increase the number of development well drilling activities by 616 wells, or an increase.

144 percent compared to 2020's realization of 252 wells. Mahakam Working Area is one of the backbones of the national upstream oil and gas production in 2021 and towards the 2030 target, "said Erwin.

"SKK Migas encourages that in implementing this contract PHM uses domestic labor and raw materials so that local content can exceed the target set.

It is hoped that this contract will have multiple effects on service providers and national workers, including the empowerment and fostering of local SMEs around the area of ​​operation, "said Erwin.

As is known, to restrain the rate of decline in production in the Mahakam Working Area, which is already in a natural decline phase, throughout 2021 PHM will drill 73 development wells and 2 exploration wells and work on 4,150 wells intervention/service jobs. 

    PHM targets production in 2021, as follows: gas 485 mmscfd (wellhead) and liquid (oil and condensate) 22 KBOD. In 2020 PHM produces gas as much as 605.76 mmscfd (wellhead) or 3% higher than the 2020 WP&B target, which is 590.35 mmscfd, and liquid as much as 29.51 KBOD or 4% higher than the WP&B 2020 target of 28.43 KBPD

Investor Daily, Page-10, Friday, Feb 5, 2021

Pertamina Hulu Energi Completes KLD Project

 

PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ), a subsidiary of PT Pertamina Hulu Energi (PHE), has completed the KLD Project in the ONWJ Block. This project provides an additional gas supply of 16 million standard cubic feet per day / MMscfd. 

    PHE Development and Production Director Taufik Aditiyawarman said the KLD project was successfully completed three months earlier than the set schedule and without any accidents (zero-incident). This is due to hard work and coordination with various parties, including the project contractor, PT Meindo Elang Indah.

"Gas production from the KLD Field will be used entirely for domestic interests so that it will drive the industrial economy around our working area," he said.

He explained, the KLD Field off the north coast of West Java began construction in April 2019. The KLD project has gone through several stages, including fabrication in the Handil Field, load out and sail away in mid-July 2020, off-monitoring installation, drilling activities, hook up, commissioning, and start-up. According to Taufik, the KLD Field has started distributing gas since December 2020. In early January, PHE ONWJ has completed a performance test period according to production operation parameters.

"From the KLD Field, it is targeted that gas production is 16 MMscfd in the peak production period," said Taufik.

Blogger Agus Purnomo in SKK Migas

Meanwhile, Julius Wiratno, Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), appreciated PHE ONWJ for successfully completing the Project in the midst of difficult conditions. The reason is, last year was a very challenging year where world oil prices were relatively low and the Covid-19 pandemic had an impact on the dynamics of the upstream oil and gas industry and its supporting sectors.

His party will continue to strive to increase supervision and control of field development projects, as well as coordinate with oil and gas companies and other stakeholders to minimize the impact of the pandemic. The success in the KLD Project is expected to be able to encourage PHE to carry out various upstream activities so that it can have an impact on national oil and gas production, including having a chain effect on the economy and employment.

"And in the long term it will support efforts to achieve oil production of 1 million barrels per day and gas of 12 BSCFD (billion standard cubic feet per day) in 2030 to realize national energy security," said Julius.

Referring to SKK Migas data, the KLD Project is included in 12 projects that are planned to start operating this year. The entire project will provide additional oil production of 28,508 bpd and gas of 484.2 MMscfd. The 12 projects are expected to support the achievement of this year's oil production target of 705 thousand BPD and gas 5,638 MMscfd.

Investor Daily, Page-10, Monday, Jan 25, 2021

Hard Work in the Upstream Oil and Gas Industry

 

Although the oil and gas industry is still challenging, the Special Task Force for Upstream Oil and Gas Business Activities or SKK Migas still targets 14 upstream projects to start operating this year.

SKK Migas Operations Deputy Julius Wiratno said that this year, there were 12 upstream oil and gas non-PSN (National Strategic Projects) projects that were targeted to start operating or onstream. The number is an increase of one project compared to last year's target.

Blogger Agus Purnomo in SKK Migas

"There will be 12 non-PSN projects on stream with a project value of US $ 354 million and the potential for additional oil production of 27,000 bpd and 492 MMscfd of gas," he said.

Meanwhile, the two PSN projects that will be onstream in 2021 are the Jambaran Tiung Biru project by PT Pertamina EP Cepu (PEPC) and the Tangguh Train-3 project by BP. 

PT Pertamina EP Cepu (PEPC)

    The Jambaran Tiung Biru project is projected to be onstream in the fourth quarter of 2021. The project work as of the third quarter of 2020 still reached 74.28% of the target of 88.28%. 

The Jambaran Tiung Biru Oil Field

    Similar to the Tiung Biru Jambaran Project, the Tangguh Train-3 project is projected onstream in the fourth quarter of 2021. As of September 2020, the progress of Tangguh Train-3 onshore work has reached 88.27%, and offshore has reached 98.27%.

the Tiung Biru Jambaran Project

"Apart from the difficulties of the Covid-19 pandemic, we are still targeting onstream at the end of 2021," he said.

Although SKK Migas is optimistic that the work plan in the upstream oil and gas sector will proceed as planned, a number of challenges, particularly those affecting the project's economy, are still looming. The government is also considered to have to be more active so that a number of oil and gas projects whose work is constrained can be realized immediately. 

    So far, there are two upstream oil and gas projects that are still unclear because the company plans to release its participation, namely Shell in the Masela Block Abadi field project and Chevron in the Indonesia Deepwater Development (IDD) project.

Trisakti University teaching staff Pri Agung Rakhmanto explained that in the case of the Masela Block project, the government needs to be more active to play a role in obtaining gas buyers. Meanwhile, in the IDD project, middle ground and a compromise must be found in terms of project economics. 

    An observer of the energy economy from Gadjah Mada University Fahmy Radhi is of the opinion that the government should step in so that the Masela Block construction can be completed on time, including in land acquisition to build a pipeline network. This is an important part needed to distribute the gas produced from the Abadi field.

"The challenge is completing the construction and pipeline infrastructure for gas distribution from the Masela Block to consumers. With great prospects, it is not difficult for Inpex to find investors to replace Shell, "he said.

The Executive Director of the National Oil and Gas Companies Association (Aspermigas), Moshe Rizal Husin, assessed that the homework that the government still has to do is to revive the investment climate in the upstream oil and gas sector. Meanwhile, based on SKK Migas data, the realization of upstream oil and gas investment in 2020 only reached the US $ 10.21 billion, lower than the target of US $ 12.1 billion. For this year, SKK Migas is targeting upstream oil and gas investment of US $ 12.3 billion.

"There must be a significant breakthrough and commitment from the government that creates certainty. The oil and gas business is long-term and has a very large multiplier effect, ”said Moshe.

Moshe hopes that the condition of the upstream oil and gas industry this year can run better with stable oil prices at a level above the US $ 50 per barrel or even could improve to the level of US $ 60 per barrel in the third quarter of 2021.

KEEP PRODUCTION

In other developments, the development program in the Mahakam Block will run more aggressively in order to reduce the rate of natural production decline. SKK Migas has approved the work plan of PT Pertamina Hulu Mahakam (PHM) in 2021 with more drilling activities compared to 2020. Thus, production in the Mahakam Block in 2021 is expected to increase with more massive and aggressive optimization.

Deputy of Finance and Monetization of SKK Migas Arief S. Handoko said that if production from the Mahakam Block drops, domestic LNG production will also decline. However, PHM will get incentive approval so that production is maintained.

Merakes Field By ENI Italy

"The possibility of production stays, even increases. In addition, there is a new Merakes field that will contribute so that LNG production will increase, ”he explained.

Agus Amperianto

Likewise, General Manager of PHM Agus Amperianto said that his party is optimistic that it can maintain production in the Mahakam Block by optimizing work in the field development operations that have been approved by SKK Migas.

"Currently, what is possible for Mahakam to do is how to survive in times of crisis," he said.

He added that this year there are a number of efficiency programs, including reducing the operating costs of the Mahakam Block effectively and efficiently. In addition, PHM will also strengthen operational activities through collaboration, strengthening knowledge management, and organizational transformation. 

    Based on the 2021 work program and budget (WP&B), PHE will carry out 73 development well drilling activities and two exploration wells drilling. Meanwhile, as of December 31, 2020, the realization of PHE's oil and gas production was still above the target.

Oil and condensate production was recorded at 26,363 bpd or 102% of the revised WP&B of 25,722 bpd. Meanwhile, gas production reached 606 MMscfd or 103% compared to the revised WP&B of 588 MMscfd.

Bisnis Indonesia, Page-4, Tuesday, Jan 5, 2021

Upstream Oil and Gas Successfully Recorded Excellent Performance

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) has managed to record brilliant performance throughout 2020 by achieving several targets set by the government.

Blogger Agus Purnomo in SKK Migas

It is recorded that the national upstream oil and gas sector produced five impressive achievements in the aspects of the Reserve Replacement Ratio (RRR), oil and gas lifting, cost recovery control, state revenues, and completion of upstream oil and gas projects.

At the end of 2020, oil lifting was recorded at 706 thousand barrels of oil per day (BOPD) or 100.2 percent exceeding the target of the Revised State Budget (APBN-P) which was set at 705 thousand BOPD.

Meanwhile, gas lifting was 5,461 million standard cubic feet per day (MMSCFD), slightly below the APBN-P target of 5,556 MMSCFD or reached 98.3 percent. As for state revenues, the figure achieved was US $ 8.4 billion, or 141 percent of the target set at the US $ 5.86 billion.

Dwi Soetjipto

"2020 is a difficult year for all business actors, especially in the upstream oil and gas sector, apart from being affected by the Covid-19 pandemic, we are also overshadowed by low world oil prices. However, thanks to hard work with KKKS (Cooperation Contract Contractors), in the end, the upstream oil and gas industry succeeded in exceeding several targets set by the government. The contribution of this industry is expected to help the national economy which is also affected by the pandemic, ”said the head of SKK Migas, Dwi Soetjipto.

Dwi added that another achievement was that SKK Migas was able to complete 15 onstream projects out of the 11 targeted onstream projects or 136 percent. Of these 15 projects, the potential for additional oil production is 9,182 BOPD and gas of 111 MMSCFD. The upstream oil and gas investment reached the US $ 10.21 billion and cost recovery control was US $ 8.12 billion according to the government's target.

According to the Deputy Head of SKK Migas, Fatar Yani Abdurrahman, during the 2020 period, there were several important milestones that were achieved including the completion of 24 PSC Side Letters and 61 LoAs and Amendments to the Natural Gas Sale and Purchase Agreement (PJBG) related to gas price adjustments in accordance with the Regulation of the Minister of Energy and Mineral Resources No. 89K / 2020 and 91K / 2020.

"The total adjusted gas reaches 2,601 British thermal units per day (BBTUD), consisting of 1,205 BBTUD for the downstream industry and 1,396 BBTUD for the State Electricity Company (PLN). This gas price adjustment aims to have an economic impact on the country through growing downstream industrial activities and reducing the burden of electricity subsidies, "he explained.

In addition, SKK Migas also successfully completed the Heads of Agreement (HoA) for the transition to the Rokan Block on September 28, 2020.

PT CPI (Chevron Pacific Indonesia)

"With the implementation of the HoA, PT CPI (Chevron Pacific Indonesia) can conduct drilling to maintain Rokan production until the end of the contract," explained Fatar.

Sakakemang Block

Fatar added that the first Plan of Development (POD) for the Kaliberau Field, Sakakemang Block was also approved by the government on December 29, 2020. With this approval, the realization of the Reserve Replacement Ratio (RRR) stands at 101.6 percent with additional reserves of 705.16 MMBOE.

Meanwhile, based on this brilliant record, Fatar said SKK Migas was optimistic in welcoming 2021. He said that his party had finished compiling work programs and budgets with KKKS to achieve government targets.

"We know that the oil lifting target that has been set has not changed from this year, which is 705 thousand BOPD. To ensure there is no decline in production, SKK Migas is trying to carry out massive, aggressive and efficient activities. We are also determined, in 2021 there is no decline in national oil and gas production, "he concluded.

Bhirawa, Page-10, Monday, Jan 4, 2021

Potential The Rokan Block Still Becomes SKK Migas Mainstay

    The Rokan Work Area (WK) which will be managed by the Cooperation Contract Contractor (KKKS) Pertamina Hulu Rokan in August 2021 still has large potential reserves. Therefore, the success of managing the block is one of the keywords for success towards achieving the target of 1 million BOPD (barrels of oil per day) and 12 BSCFD of gas (billion cubic feet per day) by 2030.

    That is the summary of the Focus Group Discussion entitled "Guarding the Transition of Rokan, Maintaining National Production" which was held online in Jakarta (23/11). 

Satya Widya Yudha

    The FGD presented expert advisors to the Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Satya Widya Yudha, Head of the Formality Division of SKK Migas, Didik S. Setyadi, Head of the Management of Goods and Services Procurement Division of SKK Migas, Erwin Suryadi, IATMI Practitioners, Hadi Ismoyo, National Oil and Gas Observer, Mukhtasor, Fahmy Radhi, and Abdul Muin.

    Satya said the potential oil reserves from WK Rokan are estimated to be 2 billion barrels. 

The Rokan Work Area (WK), Chevron

"Taking into account the existing potential, the WK Rokan will remain the backbone of national oil and gas production for a long time, through existing fields, field optimization, optimization of a waterflood, steam flood, and chemical EOR methods. So this working area will also be a mainstay to support the production target of 1 million barrels in 2030, "said Satya.

    Seeing this opportunity, SKK Migas is trying to make the transition period until 2021 run smoothly. This effort is not only a transition related to production operations but also other crucial matters, namely land-related permits.

Blogger Agus Purnomo in SKK Migas

"In the identification of SKK Migas, there is land that will be the drilling location but has not been certified as belonging to CPI (Chevron Pacific Indonesia), there is also the land that is still owned by the community. Permit readiness is absolutely passed because drilling equipment even though it is ready will be constrained if the land which is the drilling location is still controlled by other parties or the legality status is unclear, "said Head of the Formality Division of SKK Migas, Didik S. Setyadi.

Chevron Pacific Indonesia

    As an effort by SKK Migas to handle this matter, Didik said that his party is currently encouraging licensing to remain attached to the old operator. 

"Through the ODSP (One Door Service Policy), SKK Migas and CPI will resolve the licenses that are still neglected, this is so that while waiting for new operators to enter, operations will not stop. November 26, 2020, the list of licenses required by CPI must be final, "he explained.

    A similar sentiment was also conveyed by the Head of the Procurement Division of SKK Migas, Erwin Suryadi. 

“SKK Migas already has experience assisting the transfer of management of non-Pertamina CAs to Pertamina. We make learning each case so that when we manage the transfer of management of WK Rokan, we are sure that investors can still be implemented, "he said.

The Rokan Block Working Area Oil and Gas

    National oil and gas observer, Mukhtasor, said the transfer of management was quite complicated because the cooperation contract did not regulate matters related to management transfer. 

"One of the articles in the Ministerial Regulation ESDM # 15 of 2015 states that new operators can enter 6 months before the contract expires, this is not effective and will not be able to maintain production when new operators enter, "he said.

    However, his party appreciates the steps taken by CPI and SKK Migas which are trying to guard the transfer of management well, because there are many things that are not regulated but are done by CPI and SKK Migas so that the transfer of management runs well. One of them is the preparation of the 2020 AMDAL/IEA document. 

"As a resource person from the Ministry of Environment and Forestry in the preparation of upstream oil and gas, I am very proud of the proposed AMDAL," he said.

"Governance in the transitional period must be improved and currently is outside the realm of SKK Migas. This is the right momentum so that the authority of SKK Migas in terms of the transition to the end of the CA can be lifted so that the future transition can be carried out better, "continued Mukhtasor.

Importance of Investment

    The speakers saw that efforts to increase production at the Rokan WK could be realized if there was sufficient investment needed. Oil and gas practitioner, Hadi Ismoyo conveyed, it takes a strong commitment from Pertamina and the government, to invest tens of millions of dollars because the activities carried out must be quite massive.

    Gadjah Mada University energy economy observer, Fahmi Rady hopes that Pertamina will focus on concentrating its strength in WK Rokan, whose potential is still very large and the results are certain. Meanwhile, another upstream oil and gas observer, Abdul Muin, added that the way to increase oil and gas production in WK Rokan is through aggressive investment and must be realized according to commitments.

"So, if Pertamina has difficulties related to investment costs, it is better to open up options to cooperate with other companies. This is commonly done by the upstream oil and gas industry because they will also share risks and collaborate according to their respective advantages, "concluded Muin.

Source: Press release SKK Migas, Tuesday, Nov 24, 2020

21 EOR Projects will be Upstream Until 2030

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

Blogger Agus Purnomo in SKK Migas

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

Dwi Soetjipto

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

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

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

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

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

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

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

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

The Rokan Block Chevron

Rokan Block

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

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

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

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

PT Pertamina Hulu Energi (PHE)

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

PT Chevron Pacific Indonesia 

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

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

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

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

When signing the Rokan Block contract, the implementation of EOR activities was one of Pertamina's commitments. This is as stated in the Decree of the Minister of Energy and Mineral Resources 1923K / 10 / MEM / 2018. Some of these activities are the US $ 4 million EOR study, US $ 247 million stage-1 CEOR 7 pattern, and the US $ 88.6 million stage-1 steam flood Kulin or Rantau Bais.

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