Chevron Drills 12 Wells in the Rokan Block

 

    PT Chevron Pacific Indonesia has only drilled 12 wells in the Rokan Block, even though the transfer of management to PT Pertamina (Persero) only has 6 months left. Julius Wiratno, Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), said that the number of wells drilled was an activity undertaken by Chevron since last year. He revealed that the drilling of the Rokan Block well had several problems.

the Rokan Block

“The condition of the field after the rain is very challenging and we haven't drilled in the Rokan block for several years. "Procurement of goods and materials for the time being that is running out is also a challenge in itself," he said.

Blogger Agus Purnomo in SKK Migas

    Meanwhile, SKK Migas has prepared steps so that drilling activities in the Rokan Block to hold down the rate of decline in production during the transition period can continue. Julius said that his party will soon be aggressive in looking for materials for drilling the well. According to Julius, his party will try to drill the Rokan Block as much as possible with the target of still being able to drill more than 100 wells by August 2021.

"In the process, well the hard looks are a bit difficult to find," he said.

    The drilling of the Rokan Block well is a commitment in the Head Of Agreement (HoA) on September 28, 2020, for investment during the transition period in the Rokan Block. Chevron will invest the US $ 154 million for drilling activities. 

    In 2021, Chevron will drill 101 wells with an estimated investment of US $ 143 million to increase production by 5,000 barrels of oil per day. If Chevron is unable to complete the Well drilling according to the target, then the work will be continued by Pertamina with an investment from Chevron.

    The teaching staff of Trisaksi University, Pro Agung Rakhmanto, is of the opinion that the realization of drilling 12 wells can be said to be very good progress during the transition period. This is because, based on experience with transitions in other oil and gas blocks, the transition process often does not take place smoothly. 

    As a result, activities, and efforts to maintain production only started when the transfer of management was actually in a new contract position. According to him, SKK Migas, Chevron, and Pertamina just need to continue the transition process, which is already progressing well.

"Do not have too many expectations that are not well-founded, because after all there is a consequence of slowing down operating activities and then a decline in production from a decision to transfer the management of an already operating oil and gas block to a new operator," he said.

    Meanwhile, the investment required to achieve and maintain production of 1 million barrels of oil per day and 12,000 MMscfd of gas is estimated to reach the US $ 2S0 billion in the next 10 years. Head of the SKK Migas Goods and Services Procurement Management Division Erwin Suryadi said this year, the list of procurement of goods and services that had been set was 1,482 packages with a total project value of US $ 6.05 billion.

"Based on this investment, it requires a system of procurement of goods and services that is effective, efficient, and capable of being a strong leverage to move the upstream oil and gas industry," he said.

    He said SKK Migas is working with the Indonesian Petroleum Association (IPA) to accelerate the completion of the tender process and strengthen synergy and collaboration with all stakeholders.

"The IPA Supply Chain Management Committee is expected to be able to bridge operational activities and fulfillment of the Domestic Component Level (DCL/TKDN)," he explained.

Bisnis Indonesia, Page-20, Friday, Feb 26, 2021

January, Upstream Oil and Gas Investment Reaches The US $ 8732 Million

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted that the realization of upstream oil and gas investment in January 2021 reached US $ 873.2 million or 7.05 percent of this year's target of US $ 12.38 billion. This realization is better than the condition in January 2020 which was the only US $ 767.5 million.

Blogger Agus Purnomo in SKK Migas

    Acting Head of Program and Communication Division of SKK Migas Susana Kurniasih said the investment achievement was after the successful completion of the accelerated completion of supporting documents for program implementation at the end of last year.

"So that the realization of investment in January 2021 is higher in number and percentage compared to the same period last year," said Susana.

    Susana explained that the investment realization in January was to support exploration and development activities. These exploration activities were carried out by PT Pertamina EP, PT Pertamina Hulu Mahakam (PHM), ENI East Sepinggan, PT Pertamina Hulu East Kalimantan (PHKT), and PT Pertamina Hulu Energi Offshore South East Sumatra (PHE OSES).

ENI

    Meanwhile, development activities in the form of Well drilling were carried out by PHM, ENI East Sepinggan, Pertamina EP, PT Pertamina Hulu Sanga-Sanga (PHSS), PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ), Petronas Carigali Ketapang II, Exxon Mobile Cepu Limited EMCL, and BP Tangguh.

 Blogger Agus Purnomo in Petronas Carigali Ketapang II

    From the procurement aspect, the 2021 procurement list, which was completed at the end of last year, was able to accelerate the process of procuring goods and services this year.

"In addition, the highest number of procurement packages is in January 2021, so that KKKS (cooperation contract contractors) will have a longer time to carry out operations for upstream oil and gas management," said Susana.

    His party will continue to oversee upstream oil and gas investment this year, including related to licensing and procurement of goods and services. He hopes that the minimum procurement constraints can encourage optimal investment absorption. 

    In addition, his party will coordinate with the Investment Coordinating Board (BKPM) so that this year's upstream oil and gas activity plan can be carried out as planned. He is also optimistic that upstream oil and gas investment this year will be better than last year.

"As world oil prices improve, business players' optimism towards Covid-19 prevention and massive vaccination in various countries including Indonesia, the upstream oil and gas business climate this year will be much better than 2020," said Susana.

    The investment realization also has an impact on the smooth running of upstream oil and gas projects. Of the target of 12 upstream oil and gas projects this year, two projects have started operating in January, namely the KLD ONWJ Project with an investment of US $ 34 million and the gas supply project to the Balikpapan Refinery of US $ 27 million. This month, the US $ 46 million West Pangkah Project is scheduled to start operating.

Investor Daily, Page-10, Wednesday, Feb 24, 2021

Upstream Oil and Gas Investment is US $ 873.2 Million

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) said the realization of upstream oil and gas investment in January 2021 was positive. Investment realization last month was recorded at the US $ 873.2 million or 7.05 percent of the investment target of US $ 12.38 billion this year. 

    Acting Head of Program and Communication Division of SKK Migas Susana Kurniasih revealed that the realization of this investment was higher than the investment achievement in the same period in 2020 which amounted to the US $ 767.5 million or 5.55% of the annual target.

ENI

    Meanwhile, investment realization throughout January 2021 was used to support exploration activities, including by Pertamina EP, Pertamina Hulu Mahakam, ENI East Sepinggan, Pertamina Hulu East Kalimantan, and PHE OSES. In addition, this investment is also used to finance development activities. 

Exxon Mobile Cepu Ltd (EMCL)

    Primarily, the drilling of development wells, such as carried out by Pertamina Hulu Mahakam, Pertamina Hulu Sanga-Sanga, PHE ONWJ, ENI East Sepinggan, Pertamina EP, Petronas Carigali Ketapang II, Exxon Mobile Cepu Ltd (EMCL) and, BP Tanguh.

Blogger Agus Purnomo in Petronas Carigali Ketapang II

BP Tanguh

    Since discussing work, program, and budget (WP&B), SKK Migas claims to continue to coordinate with Cooperation Contract Contractors (KKKS), by conducting supervision and assistance with work program plans that have been approved in WP&B 2021. SKK Migas sees, accelerating the implementation of work programs in KKKS by endeavoring to complete the supporting documents for this year's program implementation has shown good results.

                                Blogger Agus Purnomo in SKK Migas

"So, the investment realization in January 2021 is higher in number and percentage compared to the same period last year, said Susana.

    SKK Migas and KKKS have also completed the 2021 procurement list at the end of 2020 and are also considered to have a positive impact on efforts to accelerate the process of procuring goods and services this year. 

    In addition, the highest number of procurement packages was in January 2021. As a result, KKKS will have a longer time to carry out operations for upstream oil and gas management. Susana explained, efforts to oversee upstream oil and gas investment were continuously carried out from various aspects, including licensing and procurement of goods and services. SKK Migas hopes that the absence of obstacles in the procurement process will contribute to optimal investment absorption.

    Indeed, investment requires support from various related agencies. On that basis, SKK Migas continues to carry out intensive coordination including with the Investment Coordinating Board (BKPM) so that the 2021 work program can be carried out according to the target. 

    SKK Migas is also optimistic that investment realization in 2021 will be better than in 2020. This is in line with the continuing improvement in world oil prices and optimism among business players towards the prevention of Covid-19.

"As well as the implementation of massive vaccinations in various countries including Indonesia, the upstream oil and gas business climate this year will be much better than in 2020," said Susana.

    The improved investment realization also had an impact on the smooth running of upstream oil and gas projects. Of the 12 onstream upstream oil and gas project targets, in January 2021 there were two onstream projects, namely the KLD ONWJ project with an investment value of US $ 34 million and the gas supply project to Pertamina Refinery Unit 5 Balikpapan with an investment value of US $ 27 million.

"In February 2021, the West Pangkah project is planned to be onstream with an investment of US $ 46 million," concluded Susana.

Kontan, Page-13, Tuesday, Feb 23, 2021

Negotiations to be completed in March 2021

 

    The negotiation process between PT Chevron Pacific Indonesia and Eni for the transfer of management of the Indonesia Deepwater Development project is targeted to be completed by March 2021. 

PT Chevron Pacific Indonesia

    Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Julius Wiratno said that his party hopes the Indonesia Deepwater Development project (IDD) will immediately get new partners so that project implementation can be carried out quickly.

Blogger Agus Purnomo in SKK Migas

"It is hoped that the IDD will be completed by the end of March. Hopefully, the B to B will run smoothly, "he said.

    Chevron Pacific Indonesia Corporate Communication Manager Sonitha Poernomo said that his party is still working with SKK Migas and potential partners to continue realizing the potential of the IDD project.

Sonitha Poernomo

"However, according to policy we cannot provide detailed information on commercial negotiations," said Sonitha Poernomo.

    Head of SKK Migas Dwi Soetjipto said that Chevron had applied for a data opening permit to find new investors since July 2019 and was submitted again in February 2020. Dwi revealed that ENI was one of the most potential partners for the project.

"New operators can start proposing an extension of the Work Area and at the same time finalizing the discussion on the proposed revision of the IDD POD-I," he said.

    In other developments, SKK Migas noted that the realization of oil and gas investment as of January 2021 had reached the US $ 873.2 million. Acting Head of Program and Communication Division of SKK Migas Susana Kurniasih explained that the realization was 7.05 percent of this year's investment target of US $ 2.38 billion. This achievement is even better than the realization of investment in the same period last year which was valued at the US $ 767.5 million or 5.55% of the target.

Susana Kurniasih

    Susana explained investment realization during January 2021 was used to support exploration activities, including those carried out by Pertamina EP, Pertamina Hulu Mahakam (PHM), ENI East Sepinggan, Pertamina Hulu East Kalimantan, and PHE OSES. Investments are also used to finance development activities, particularly to finance development well drilling activities.

Bisnis Indonesia, Page-4, Tuesday, Feb 23, 2021

The Jumbo Oil and Gas Project Is Still Ongoing

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) ensures that several upstream oil and gas projects are still continuing. This is to support the achievement of oil production targets of 1 million barrels per day and natural gas 12 billion standard cubic feet per day by 2030.

the Merakes project 

    Deputy for Operations of SKK Migas, Julius Wiratno, said that major projects in the upstream oil and gas sector are still in the construction stage, some of which are expected to be completed by the end of 2021. One of them is the Merakes project which is being worked on by Eni East Sepinggan.

Eni

"We hope this project can be on stream in April with gas production of 380-400 mmscfd," he said.

the Jambaran Tiung Biru (JTB)

    There is also the Jambaran Tiung Biru (JTB) project that is being supported by SKK Migas and the government so that it can be on stream in November this year. In the future, the project managed by PT Pertamina EP Cepu (PEPC) will produce 350 mmscfd of gas.

    SKK Migas is also working on the Tangguh Train-3 project that BP Berau Ltd is working on to be on stream immediately at the end of this year or early next year.

Blogger Agus Purnomo in SKK Migas

    The project is indeed constrained from an operational perspective due to restrictions on social activities in the context of tackling the Covid-19 pandemic.

the Masela Block

"Other major projects such as Indonesia Deepwater Development (IDD) and the Masela Block are in the process of business-to-business discussions between contractors and their partners," said Julius.

Indonesia Deepwater Development (IDD) Chevron

    The IDD project is facing obstacles because its main investor, Chevron Pacific Indonesia, is reportedly leaving, even though this project should be targeted to be on stream in 2025.

Kontan, Page-10, Saturday, Feb 20, 2021

The Merakes Project will be Operated in the Second Quarter of 2021

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is optimistic that the Merakes Field development project, the East Sepinggan Block, will start operating in the second quarter of this year. This project will generate additional gas production of up to 368 million standard cubic feet per day / MMScfd.

Blogger Agus Purnomo in SKK Migas

    Deputy for Operations of SKK Migas Julius Wiratno said that the work on the Merakes Project which was undertaken by ENI East Sepinggan had been delayed due to the Covid-19 pandemic. The main obstacles faced were restrictions on the movement of goods and Human Resources (HR) required by the project. However, ENI and his party are trying to catch up with the delay in this project.

ENI

"Currently, the activities have been carried out smoothly, so that the project progress has reached 88.5% or only 1.5% slower than the target. We are trying to get the first gas project at the end of April 2021, "said Julius.

the Merakes Field

    This year, gas production from the Merakes Field is targeted to reach 345 MMScfd. This gas production will continue to be boosted so that it can reach peak production of up to 368 MMscfd in 2022.

"Gas from this field will be flowed to the Bontang LNG Refinery in East Kalimantan to fulfill existing market commitments," he added.

    The construction of the Merakes Project began in 2019 with an investment fund of US $ 1.3 billion. In the plan of development / POD for the Merakes Project, ENI plans to drill six underwater wells and build a submarine pipeline system that will be connected to the floating production unit / FPU of Jangkrik Field in the Muara Bakau Block. 

Jangkrik Field

    Later, the Merakes Field gas will be sent via the existing pipe from the Jangkrik Field FPU to the Bontang LNG Refinery operated by PT Badak NGL. Similar to the Jangkrik Field, the Merakes Field will also extend the operating life of the Bontang LNG Plant.

    ENI stated that Merakes Field is estimated to have gas reserves of 2 trillion cubic feet in its official statement. This oil and gas potential was discovered after ENI drilled the Merakes-1 well in 2014. Furthermore, in 2017, ENI drilled the Merakes-2 appraisal well. In January, two Projects Completed SKK Migas succeeded in completing two of the 12 oil and gas projects targeted to operate in 2021.

    The two projects are the KLD Project by PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ) with a capacity of 16 MMscfd and the project to divert gas supply from the South Mahakam Field to the Balikpapan Refinery by PT Pertamina Hulu Mahakam (PHM) 50 Mmscfd. According to Julius, these two projects were successfully completed on time, despite the Covid-19 pandemic.

"The timely implementation of these two projects gives confidence that the implementation of other projects that will be carried out in 2021 can be realized on time," said Julius.

    Together with the cooperation contract contractor (KKKS), they are trying to maximize the implementation of activities in the field. One of them is by accelerating the realization of projects that are supposed to be implemented next year to this year.

"I do not promise, but we are trying to accelerate the achievement of activities like last year. This acceleration requires a very large effort, "said Julius.

    Last year, SKK Migas succeeded in realizing the operation of 15 projects out of the targeted 12 projects, even though one project encountered obstacles.

    Julius hopes that acceleration efforts can be carried out considering that current oil prices are improving faster than world predictions so that they can also increase the economic calculation of upstream oil and gas business activities. After the average world oil price in January reached around the US $ 55 per barrel, the oil price reached US $ 63 per barrel this February. 

    Meanwhile, the oil price assumption in the APBN is the US $ 45 per barrel. The total investment for the 12 upstream oil and gas projects which are scheduled to operate this year reaches the US $ 1.7 billion. The 12 projects will provide additional oil production of 28,508 barrels per day (bpd) and gas of 484.2 MMScfd.

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

Without Incentives, Mahakam Block Production has the Potential to Drop

 

    Additional incentives from the government are considered crucial to boost oil and gas production from the Mahakam and Sanga-Sanga blocks. The reason is, without incentives that are able to open new potential, the production of the two oil and gas blocks in East Kalimantan has the potential to drop drastically in the next three years.

Sanga-Sanga blocks

    Head of the Exploration Planning Division of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Shinta Damayanti said that providing additional incentives is very important to boost existing oil and gas production and encourage exploration activities. So far, incentives have been provided for two subsidiaries of PT Pertamina Hulu Energi (PHE), namely PT Pertamina Hulu Sanga-Sanga (PHSS) and PT Pertamina Hulu Mahakam (PHM).

Blogger Agus Purnomo in SKK Migas

"If they are not given incentives, their oil and gas production will decline significantly in 2024," said Shinta Damayanti.

    Deputy for Operations of SKK Migas Julius Wiratno revealed that the government through the Ministry of Energy and Mineral Resources has approved a number of incentives for the Mahakam Block.

"There has been a letter from the Minister of Energy and Mineral Resources dated January 6, 2021, regarding the change of FTP from 20% to 5% and incentives for upstream oil and gas in the form of accelerated depreciation at the cost of capital," he said.

    Apart from this upstream incentive, SKK Migas has also proposed a number of fiscal incentives for the Mahakam Block. These fiscal incentives include exemption from a number of taxes, LMAN tariff fees, and utilization of state-owned goods from the termination block, as well as domestic market obligation (DMO) holidays. This tax exemption includes Value Added Tax (VAT/PPN) and Land and Building Tax (PBB) for the exploitation stage, Income Tax (PPh), and VAT for joint facility operating costs, Income Tax (PPH) and, VAT for the allocation of indirect head office costs, as well as PDRI and import duties.

"Regarding fiscal incentives, SKK Migas was asked to send another letter to be forwarded to the Minister of Finance," explained Julius.

Dwi Soetjipto

    In fact, the Head of SKK Migas Dwi Soetjipto previously stated that all upstream and fiscal incentive instruments were needed to provide a reasonable economy for the Mahakam Block. This is based on the economic study of his party and the Cooperation Contract Contractor (KKKS). SKK Migas has recorded a number of field development plans, including work plans to keep Mahakam Block production from falling.

    For existing production, there is already a plan of development / POD with gas reserves of around 1 trillion cubic feet and 36 million barrels of oil. Later, there are 8 projects that will produce 64.4 billion cubic feet of gas and 6.4 million barrels of oil. For development, there is OPLL 2A which includes the development of South Mahakam, Sisinubi, Handil, and Bekapai which can produce additional gas reserves of 8.6 trillion cubic feet and oil of 5.1 million barrels.

    Next is OPLL 2B in the same fields with projections of additional gas reserves of 38.6 trillion cubic feet and oil of 3.3 million barrels. Then, OPLL 2C includes the construction of a new platform on Sisi Nubi and other activities that are expected to produce 215 billion cubic feet of gas and 0.6 million barrels of oil with 176 wells.

Investor Daily, Page-10, Wednesday, Feb 18, 2021

Pertamina-Chevron Intensively Discuss the Rokan Block

 

    PT Pertamina (Persero) continues to strengthen its business strategy by preparing for the transfer of management of the Rokan Block which will start operating PT Pertamina Hulu Rokan (PHR) on August 9, 2021. Pertamina continues to coordinate intensively with PT Chevron Pacific Indonesia (CPI) to discuss the Rokan Block.

PT Chevron Pacific Indonesia (CPI)

"We coordinate intensively with the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) and CPI, especially regarding the transition to nine main areas in order to ensure the continuity of all operations and routine activities after the Rokan Block is operated by PHR," said PHR's Managing Director. RP Yudantoro.

Blogger Agus Purnomo In SKK Migas

    Yudantoro said that the nine main areas of the Rokan Block transition include drilling workover, electricity and steam supply, contracts and SCM, IT and Petrotechnics, data transfer, human capital, SOPs and permits, chemical EOR and the environment, and abandonment and site restoration (ASR). 

the Rokan Block by Chevron

    Yudantoro said Pertamina's upstream sub-holding through PHR had also prepared a long-term program to maintain production and curb the rate of decline in oil. According to him, the Rokan Block is a block that naturally has experienced a decline in production from year to year condition, Yudantoro continued, efforts to contain the rate of decline and increase production are the most crucial things in the Rokan Block. At least, there will be 44 development wells that will be drilled in 2021 after the Rokan Block is transferred to Pertamina.

    Pertamina Hulu Energi (PHE) Corporate Secretary Whisnu Bahriansyah said the readiness to transfer the management of the Rokan Block was not only carried out in the operational aspect but also fostering good relations with stakeholders. The Rokan Block is a production contributor block as much as 24 percent of national production. 

    Currently, the PT Chevron Pacific Indonesia (CPI) operates with an average production of around 165 thousand barrels per day. The Rokan Block has five large fields, namely Duri, Minas, Bangko, Balam South, and Petapahan which are scattered in five districts in Riau Province.

PT Perusahaan Listrik Negara

    The development of the Rokan Block involves a number of State-Owned Enterprises (BUMN). Apart from Pertamina, PT Perusahaan Listrik Negara (Persero) will meet the demand for electricity and steam in the Rokan Block working area. PLN has signed a power and steam power purchase agreement (SPJBTLU) with PHR.

    PLN will optimize the three-year transition period by constructing the Sumatra system interconnection to replace the transitional supply and increase the supply capacity to PHR. In 2024, it is estimated that the Sumatra system's power reserve will be 3,811 megawatts (MW) or 46.1 percent, so it is certain that it is ready to meet the electricity needs of the Rokan Block.

Investor Daily, Page-10, Tuesday, Feb 17, 2021

Pertamina Prepares 9 Main Areas for Transfer of Management of the Rokan Block

 

    PT Pertamina (Persero) continues to strengthen its business strategy by preparing for the transfer of management of the Rokan Block, which Pertamina will start operating through its subsidiary PT Pertamina Hulu Rokan (PHR) on August 9, 2021. For the transition, 9 main areas were prepared to ensure the continuity of all operational activities and routine activities after the block was operated by PHR.

PT Chevron Pacific Indonesia (CPI)

"We coordinate intensively with SKK Migas and PT Chevron Pacific Indonesia (CPI), especially for the transition to 9 main areas in order to ensure the continuity of all operational activities and routine activities after the block is operated by PHR," said the President Director of PT Pertamina Hulu Rokan (PHR). RP Yudantoro.

    The nine main areas of the Rokan transition include Drilling Work Over, Electricity and Steam Supply, Contracts and SCM, IT and Petrotechnical, Data Transfer, Human Capital, SOP and Licensing, Chemical EOR, and Environment and ASR (Abandonment and Site Restoration). 

    Sub holding Upstream Pertamina through PHR has also prepared a long-term program to maintain production and curb the rate of decline in oil. The Rokan Block is a block that has experienced a natural decline in production from year to year. For this reason, efforts to contain the rate of decline and increase production are the most crucial things.

    There will be at least 44 development wells that will be drilled in 2021 after the block is transferred to Pertamina. And another 40 additional development wells are planned, according to discussions with SKK Migas. 

Blogger Agus Purnomo in SKK Migas

    Yudantoro explained that apart from drilling development wells, in the long term other programs have also been prepared in the form of Infill Drilling, exploration well drilling, workover/well intervention, optimization of waterflood and steam flood programs, CEOR, and other programs to increase reserves.

"In accordance with the period of the production sharing contract with the Government, the Rokan Block will be operated until 2041 by PHR. At that time, we had to ensure that the Rokan Block would continue to contribute optimally to national production through the various programs we implemented, "said Yudantoro.

    Whisnu Bahriansyah, Corporate Secretary of Pertamina Hulu Energi (PHE), added that readiness for management transfer is not only carried out in the operational aspect but also in fostering good relations with stakeholders.

"Subholding Upstream Pertamina through PHR also prepares community programs, so that after the transfer of management it is not only the operational side that will run sustainably but also on the social, community and environmental side," concluded Whisnu.

    The Rokan Block is a production contributor block as much as 24% of national production. Currently operated by PT Chevron Pacific Indonesia with an average production of around 165 thousand barrels per day. The Rokan Block has five large fields, namely Duri, Minas, Bangko, Balam South, and Petapahan, which are spread across five districts in Riau Province.

Investor Daily, Page-10, Tuesday, Feb 17, 2021

2021, Domestic LNG Sales are Projected to Decrease

    PT Pertamina (Persero) projects domestic sales of Liquefied Natural Gas / LNG) this year to drop to 17.6 cargoes compared to last year's 23.5 cargoes. This is because the domestic market is still affected by the Covid-19 pandemic.

President Director of Pertamina Nicke Widyawati

    President Director of Pertamina Nicke Widyawati said that the Covid-19 pandemic has suppressed domestic gas demand this year when compared to 2020. The fall

    The main demand for LNG is from PT PLN (Persero) after the drop in electricity consumption has prompted the company to prioritize electricity production from the PLTU.

"In total national LNG demand this year is 17.6 cargoes from 23.5 cargoes in 2020," he said in a meeting with Commission VII in the energy sector of the Indonesian House of Representatives.

    LNG sales also dropped significantly from the realization in 2019 which reached 38.3 cargoes. Referring to Pertamina's data, of last year's total LNG sales of 23.5 cargoes or 68.35 trillion British thermal units (TBTU), supply to PLN reached 22.5 cargoes. In detail, the supply to PLN is through FSRU Lampung with 18 cargoes, Benoa 3.2 cargoes, Amurang 0.4 cargoes, and Samberah 0.9 cargoes. 

    Meanwhile this year, the projected sales of 17.6 cargoes are entirely for PLN, namely through FSRU Lampung with 13 cargoes, Benoa and Amurang 3 cargoes, and Samberah 1.6 cargoes. Even though in 2019, LNG demand from PLN reached 37.2 cargoes, namely through FSRU Lampung 3.2 cargoes, Benoa 3.2 cargoes, and Samberah 0.6 cargoes.

    Apart from PLN, domestic LNG sales are also to PT Pupuk Iskandar Muda (PIM) and PT Pertamina Niaga. However, PIM only needs LNG when it supplies gas through pipeline insufficient, while Pertagas Niaga has no need in 2020 and 2021. In detail, LNG sales to Pertagas Niaga are 1.1 cargoes in 2019 and PIM 1.1 cargoes in 2020. Seeing this condition, exports need to be made to market the company's LNG production. 

    Although, the global gas market is also constrained by the impact of the Covid-19 pandemic, even demand from Japan and China, which are the largest markets, also fell.

"However, we are still maintaining the foreign market so that the projection in 2021 overseas demand is 68.3 cargoes, a slight increase from 2020," he said.

    The company's LNG export realization last year, according to data, reached 60.6 cargoes, namely to China 22.1 cargoes, Japan 21 cargoes, South Korea 10 cargoes, Taiwan 3.2 cargoes, Pakistan 1.1 cargoes, Singapore 0.4 cargoes, and Thailand 2.7 cargo. 

    Meanwhile, in 2019, the company's LNG exports reached 72.2 cargoes with the aim of China 18.6 cargoes, Japan 41 cargoes, South Korea 4.2 cargoes, Taiwan 3.4 cargoes, Pakistan 1.1 cargoes, Singapore 1.3 cargoes, and Thailand 2.6 cargo.

   

Blogger Agus Purnomo in SKK Migas

 Deputy for Finance and Monetization of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Arief S Handoko revealed that competition for LNG sales in the global market will be tighter after the Covid-19 pandemic which continues this year.

"The price of LNG has become a new normal because there are more LNG suppliers, so the price competition is getting tighter," said Arief.

Refinery Needs

    In the future, Pertamina is optimistic that domestic gas demand will increase. According to Nicke, the increase in gas demand is one of the reasons for the completion of the improvement and capacity-building project (upgrading) of existing refineries and the construction of new refineries. Gas demand for refineries is estimated at 1.5 million tons per year and will increase to 6.4 million tons per year in 2025. The company plans to replace the fuel at the refineries with gas.

"So that gasification occurs and will reduce the cost of energy for the Pertamina Group as a whole," said Nicke.

    However, referring to Pertamina's data citing Indonesia's 2018-2027 Gas Balance Sheet, the national gas supply will experience a deficit of up to 8.25 million tons per year starting 2025. This is in accordance with Pertamina's gas supply-demand analysis and supported by international publications related to the forecast of global LNG supply-demand. also will be a deficit from 2023-2024.

"With the commitment of the domestic market and industry, we must make future projections so that gas supply will continue for generation and other industries," said Nicke.

    In addition, the development of gas infrastructure, both midstream and downstream, must be carried out. Even the gas needs for refineries, referring to Pertamina's data, show that the company only has a commitment to supply LNG until 2023. In fact, Pertamina needs a guarantee of gas supply certainty for all refinery projects to meet the requirements of the project lenders. 

    According to Nicke, his party has sent a letter to the Ministry of Energy and Mineral Resources asking for gas allocation for these refinery projects. At the same time, to mitigate risks, his party is also building infrastructure so that refineries can get LNG.

"Discussions have been carried out, with SKK Migas as well. There is a commitment from natural gas, to ensure continuity of supply, we are building LNG infrastructure as well, "said Nicke.

Investor Daily, Page-10, Thursday, Feb 11, 2021

Pertamina EP Sangatta well reaches production of 415 BPH

 

    PT Pertamina EP Asset 5 Sangatta Field (PEP) recorded oil production of 415 barrels per day (bpd) from the ST-200 well at the end of drilling on January 30, 2021. This product is three times higher than the predicted figure from the well as of December 28. 2020.

    Sangatta Field Manager Hanif Setiawan said the successful production of the ST-200 well is the hard work of various parties that work together between PEP Sangatta, partners, PDSI, local government, and community members.

"The success of the ST-200 is proof that the synergy between lines including with stakeholders and running an unusual business operation by adapting a pandemic situation through a good COVID-19 protocol not only provides additional oil and gas production but more than that safety and health is maintained. , "said Hanif.

    Drilling of the ST-200 well located in Topo Indah Hamlet, Sangatta Selatan Village, Sangatta Selatan District, East Kutai Regency is carried out to a final depth of 2,203 meters Measure Depth (mMD) /2,076 meters True Vertical Depth (mTVD). Drilling uses rig 22.2 / OW700-M owned by Pertamina Drilling Services Indonesia (PDSI).

    PEP Sangatta continues to make the best efforts in the Well drilling process by maintaining strict health protocols from the start of preparation until drilling is carried out. The crew involved in this drilling has passed the COVID-19 health protocol screening implemented at Pertamina EP (PEP) and the local government.

    The HSSE aspect remains a full concern during the drilling process of the ST-200 well. HSSE aspects are ensured to be fulfilled for the safety and security of all parties involved. PEP Sangatta will continue to maintain and increase production through further Well drilling. 

    As a form of gratitude for the achievement of the ST-200 well drilling, PEP Sangatta distributed groceries to the people of RT 01 and RT 02 of Topo Indah Hamlet, Sangatta Selatan Village, and renovated one of the prayer rooms not far from the drilling location.

   The Head of Topo Indah Hamlet, Sulaiman expressed his gratitude to PEP Sangatta because, in addition to the residents getting assistance, some residents are also involved as drilling workers, both skilled and non-skill.

"Hopefully this Wells drilling and beyond will be successful and bring blessings. Pertamina Jaya !, "said Sulaiman.

Blogger Agus Purnomo in SKK Migas

    As a subsidiary of PT Pertamina (Persero) as well as a cooperation contract contractor (KKKS) operating under the supervision of SKK Migas, PEP is committed to meeting the country's energy needs through the management of oil and gas fields in various regions, one of which is Kalimantan. PEP, through the PEP Asset 5 operating unit, will drill 50 development wells and carry out the work of the plan for reworking the wells for 2021 drilling 18 development wells and five well rework plans.

    This activity is carried out to support SKK Migas' ideals of realizing 1 million bpd of oil production and 12 billion standard cubic feet of gas per day by 2030. Based on the SKK Migas Integrated Operating System (SOT) report dated February 4, 2021, year-to-date, PEP Asset 5 able to carve crude oil production from Kalimantan amounting to 16,172 bpd. 

Sanga-sanga Block

    Meanwhile, gas production is around 15.44 million standard cubic feet per day. 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). Sangatta Field throughout 2020 recorded an oil lifting of 696,065 barrels of oil or 101% of the target. Production was recorded at 682,734 barrels of oil or 110% of the target.

Investor Daily, Page-10, Tuesday, Feb 9, 2021