Production Targeted to Increase

 

    After officially managing the Rokan Block, PT Pertamina (Persero) through PT Pertamina Hulu Rokan (PHR) is targeted to be able to produce oil with higher achievements.

PHR

    Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Julius Wiratno said that with the number of drilling activities and the availability of more massive tools, production in the Rokan Block is targeted to increase.

"Until December 2021, with around 17-18 rigs drilling, production could be around 175,000-180,000 barrels per day," he said.

Blogger Agus Purnomo in SKK Migas

    Meanwhile, based on SKK Migas data, production in the Rokan Block throughout the first semester of 2021 by PT Chevron Pacific Indonesia (CPI) was at the level of 160,646 barrels of oil per day (BPD), this figure is lower than the target set in the 2021 State Budget of as much as 165,000 BPD.

PT Chevron Pacific Indonesia (CPI)

    President Director of PT Pertamina Hulu Rokan (PHR) Jaffee Suardin believes production in the Rokan Block can increase when the transfer of management is carried out. The reason is, throughout this year Pertamina is targeting massive drilling. PT Chevron Pacific Indonesia (CPI) plans to drill as many as 161 wells after the transfer of management in the Rokan Block which will begin on August 9, 2021.

The Rokan Block by Chevron

    Jaffee said that there will be an additional 77 wells from CPI's commitment which will not be completed until the management transfer period on August 9th. In the previous target, Pertamina planned to drill only 84 wells for 2021.

"As of December 161 wells, the target production level is maintained and can increase," he said.

    Jaffee said PT Pertamina Hulu Rokan (PHR) had prepared the resources needed to realize the plan. To realize the Wells drilling plan, 16 to 17 rigs have been prepared.

    In addition, Jaffee said that all human resources, as well as supporting materials, have been prepared so that when the transition period is over, all activities can start immediately.

"For that, we continue to make preparations, from Pertamina's side, the planned number of rigs, materials, from Pertamina's side, are ready. So, the goal is that the transfer of management process will run smoothly without any disturbances,” said Jaffee.

Bisnis Indonesia, Page- 4, Thursday, Aug 5, 2021

Pertamina Continues 318 Contracts for Goods and Services in the Rokan Block

    PT Pertamina Hulu Rokan (PHR) will continue with 318 contracts for the supply of goods/services with vendors who previously partnered with PT Chevron Pacific Indonesia (CPI). This step is considered to guarantee the continuity of the procurement of goods/services after the transfer of management of the Rokan Block, Riau, from Chevron to Pertamina starting August 9, 2021.

PT Pertamina Hulu Rokan (PHR)

    Regarding the partnership, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) hopes that PT Pertamina Hulu Rokan (PHR) will increase the empowerment of local vendors. PHR Business Support Project Leader Danang Ruslan Saleh assessed that 318 contracts out of 379 active contracts were in accordance with the company's needs.

"A total of 298 contracts have been completed in the mirroring process to ensure the continuation of the contracts that were signed when the vendor became a partner of Chevron Pacific Indonesia," he said.

    A total of four contracts of which are in the process of being amended due to the addition of post-management drilling activities. As a result, the need for rigs will be more than the rigs in the current contract. Not only contracts, but PHR has also prepared a work order for the next month so that there are no problems in providing goods/services in the operation of the Rokan Block after the management transfer.

Blogger Agus Purnomo in SKK Migas

    In addition, PHR will continue the local business development activities initiated by Chevron. Chevron Pacific Indonesia VP Procurement & Contract Sigit Pratopo said his party had provided data and information to SKK Migas and PHR, including a copy of the contract and purchase request for the mirroring process, a copy of the local business development/LBD contract for the procurement process, as well as inventory data for warehouse management by PHR.

the Rokan Block by Chevron

    This step is one way to keep the operation of the Rokan Block optimal. Post-transition, Chevron will continue the process of contract closing and purchase requests. The goal is to ensure the fulfillment of the obligations of partners providing goods/services as well as paying contract bills and purchase requests under the Chevron Pacific Indonesia entity.

    Regarding contracts with local businesses, the Head of the Division of Supply Chain Management and Cost Analysis of SKK Migas Erwin Suryadi said PHR could increase the number of LBDs involved in Riau. Currently, Riau consists of 14 areas of ring one with a total of 699 active LBD actors.

    SKK Migas data as of May 2021 shows that the contract for the procurement of goods/services with LBD for 11 years reaches Rp 1.27 trillion and requires 40,400 workers. That value is equivalent to 5,055 contracts. He added, as of August 17, 2021, PHR will be included in the centrally integrated vendor database (CVID).

    Thus, PHR and the vendors involved can more easily provide goods/services according to existing regulations. In addition, a one-year mirroring contract is considered important to maintain the continuity of the supply of goods/services until PHR can prepare the needs, including supporting infrastructure. According to the Executive Director of the Reforminer Institute, Komaidi Notonegoro, increasing the involvement of local vendors requires careful and structured planning.

“Procurement of goods/services in upstream oil and gas requires high technology. Currently, goods/services with the same specifications, local players tend to be more expensive,” he said.

    Acting Deputy for Procurement Control of SKK Migas, Rudi Satwiko, stated that contracts and supplies need to be ensured that they are smooth during the transfer of management. Rokan Block production currently contributes 24 percent to national performance. 

    However, the average production has contributed 46 percent. He is optimistic that the potential of this block is still promising and can be one of the pillars to achieve oil production of 1 million barrels per day in 2030.

Kompas, Page-11, Wednesday, August 4, 2021

Chevron Completes 100 Wells, Pertamina Continues to Drill 130 Wells

    PT Pertamina Hulu Energi (PHE) through its subsidiary, PT Pertamina Hulu Rokan (PHR), will drill 130 wells in the Rokan Block this year, continuing drilling by PT Chevron Pacific Indonesia (CPI) which has reached 100 wells. Wells, drilling is needed to maintain the level of oil production in this oil and gas block.

the Rokan Block Chevron

    PHE Development and Production Director Taufik Adityawarman said optimizing the production of the Rokan Block is one of the strategies to achieve the company's oil and gas production target this year. For this reason, once the management shifts to Pertamina on August 9, it will increase the drilling of wells in this block.

“PHR plans to drill approximately 130 development wells in 2021 which includes the remaining wells from PT CPI. PHR is also preparing approximately 290 wells in 2022. This is the oil and gas block with the highest number of Wells investments," he said at the Upstream Subholding Media Gathering.

    To support the Wells drilling target, the company will also add 10 drilling rigs. So, there will be a total of 16 drilling rigs and 29 rigs for workover and well services operating in the Rokan Block. The procurement of this rig is a mirroring of the previous contract.

    Meanwhile, in its official statement, PT CPI as the existing operator stated that it has completed drilling 100 wells, including 11 conversion wells, in the Rokan Block since the end of December 2020. CPI has also succeeded in adding rigs so that now there are 8 drilling rigs actively operating in the field.

“The Rokan Block is an important strategic asset for state and regional revenues, the community's economy, and national energy security. The collaboration between SKK Migas, PT CPI, and PT Pertamina Hulu Rokan (PHR) is going well so that the drilling program can take place safely and smoothly," said the Director of Rokan PT CPI Budianto Renyut.

Blogger Agus Purnomo SKK Migas

    The Head of Representative for the Special Task Force for Upstream Oil and Gas (SKK Migas) Northern Sumatra Rikky Rahmat Firdaus revealed that his party is committed to assisting, facilitating, and coordinating with stakeholders in the region to complete preparations for the drilling implementation so that it can be carried out smoothly and efficiently. safe.

"It takes full support from all stakeholders from the center to the regions so that the target to maintain and maintain production in the Rokan Block can be achieved. This method will increase state revenue,” said Rikky.

PT CPI

    To ensure the availability of supplies of materials to support the drilling program, PT CPI and PHR have signed a joint utilization agreement of state-owned warehouse facilities in the Rokan Block on April 21. Thus, PHR can begin to import and store materials to support the drilling program in warehouses managed by PT CPI in Duri and Dumai.

PHR

    These materials include pipes, conductors, casings, tubing, wellheads, valves, cables, and bobbing pumps. Currently, a number of PHR materials have arrived at PT CPI's warehouse.

"Hopefully, after the date of the transfer of management later, the drilling program can continue without any disruption to material supply because PHR's materials are already available in the field," said Budianto.

Investor Daily, Page-9-Saturday, July 31, 2021

Accelerating EOR Implementation, Oil and Gas Companies are Encouraged to Partner

    Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif encourages oil and gas companies to cooperate with other parties to realize advanced oil recovery (EOR) activities. The implementation of this activity is one way to achieve the oil production target of 1 million barrels per day (BPD) in 2030.

    Arifin said that accelerating the implementation of advanced production, both secondary and tertiary recovery, needs to be done to achieve the oil production target of 1 million bpd and gas 12 Billion Standard Cubic Feet Per Day/BSCFD by 2030. This acceleration is expected to provide additional contributions to national oil production. For this reason, cooperation contract contractors (KKKS) are encouraged to partner with other parties so that the EOR project can be started immediately.

“To realize the goals in 2030, several EOR projects must be planned and carried out immediately. The government also encourages KKKS to establish strategic cooperation with other parties who have competence and experience in the development and implementation of EOR," said Arifin.

Blogger Agus Purnomo in SKK Migas

    Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said that there were 23 EOR projects scheduled to operate in stages until 2030. Regarding the progress of the EOR implementation, 23 fields are still in the study stage. Meanwhile, one field is working on a field trial and one field is in the process of discussing a development plan (POD).

    Of the 23 EOR projects, most of them are Pertamina Group projects. In detail, PT Pertamina Hulu Rokan will run 7 EOR projects, PT Pertamina EP 2 projects, PT Pertamina Ogan Komering 2 projects, PT Pertamina Hulu Energi North 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 E&P Indonesia 1 project, and Petrogas 1 project. Referring to SKK Migas data, the full scale implementation schedule 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 Hopefully in 2029, and Air Serdang, Guruh, Krisna, and Mudi in 2030.

    Previously, SKK Migas Deputy Operations Julius Wiratno said that his party together with Pertamina were finalizing the POD of EOR implementation in the Rokan Block. One of them is the implementation of surfactant EOR in Minas Field, Rokan Block. The POD is targeted to be approved this year as well. If successful, this step is expected to contribute to the production of the Rokan Block in 2023-2024.

Transfer Manage

    Arifin also revealed the importance of proper and effective management transfer of terminated oil and gas blocks in maintaining national oil and gas production this year, which will also have an impact on the 2030 target. For this reason, Arifin reminded SKK Migas to continue to oversee the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia ( CPI) to PT Pertamina Hulu Rokan (PHR) on 8 August.

PT Chevron Pacific Indonesia ( CPI)

"To maintain the level of national oil and gas production, I have a special message that the transfer of management of the Rokan Block is properly guarded so that the transfer of management process can take place smoothly without disturbing the level of oil production in this block," said Arifin.

    He admitted that this year was very challenging for the upstream oil and gas industry. The realization of oil lifting to date is still at 666.6 thousand BPD and gas at 5,430 million standard cubic feet per day/MMscfd. Meanwhile, the target of the State Revenue and Expenditure Budget is 705 thousand BPD for oil lifting and 5,638 MMScfd for gas.

"2021 will be a year of proving the resilience of the upstream oil and gas industry to maintain production," he said.

    Julius had said that his party was optimistic that oil production in the Rokan Block could rise again despite the transfer of management. The reason is, even now, there are indications of an increase in production by carrying out massive Wells drilling during the operatorship transition period. Next year, the production of this block is expected to return to the level of 175-180 thousand BPD.

    The implementation of Wells drilling is one of the nine issues monitored by SKK Migas in the transfer of management of the Rokan Block. Until now, the realization of drilling development wells in the Rokan Block has reached 83 wells from the target of 180 wells this year. Furthermore, the realization of rework (workover) wells as many as 40 wells from the target of 39 wells, and well services (well services) 5,135 activities out of a target of 6,819 activities.

Investor Daily, Page-10, Thursday, July 29, 2021

Post-Transfer of Management, Production of Rokan Block Is Believed to Increase

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) and PT Pertamina Hulu Rokan (PHR) believe that through the efforts that will be carried out after the transfer of management from PT Chevron Pacific Indonesia (CPI) on August 9, 2021, oil and gas production in the Rokan Block in Riau Province will increase.

the Rokan Block Chevron

    This is the conclusion of the discussion on the theme of Maintaining the Reliability of Operations in the Rokan Region, which was held virtually by the Energy and Mining Editor Society (E2S) in Jakarta. 

Blogger Agus Purnomo In SKK Migas

    Appearing as speakers at the discussion was Deputy Head of SKK Migas Fatar Yani Abdurrahman, PHR President Director Jaffee Arizon Suardin, and Secretary-General of the Indonesian Petroleum Engineering Experts Association (IATMI) Hadi Ismoyo.

“All items have been identified. So now the point is, it must be massive, aggressive, efficient, resilient, tough, and out of the box, beyond normal limits," said Fatar Yani.

    Fatar Yani said the longest contributing oil and gas block in Indonesia and still has attractive potential is the Rokan Block. The Rokan Block has been the backbone of national oil production for 70 years since its first production in 1951 by Chevron. The fate of the block has been determined since 2018. At that time it was still a top producer so the transition process began in a long time.

“So this long transition can be done seamlessly and without any problems. The Rokan Block also has potential reserves in unconventional forms. The most widely operated wells in Rokan, there are 10,000 wells, currently, around 8 thousand are operating," he said.

    According to Fatar, the strategy in managing the Rokan block post-transition for the short term in 2021 is to maintain production and a successful transition to PHR, the 2022-2025 period is an effort to increase production with significant investments including the production of Chemical EOR in Minas. The long-term in 2026 is high production according to PHR Rokan's long-term plan (LTP).

“Considering the enormous contribution of the Rokan block, the Government and SKK Migas have paid attention when this block is in the process of transitioning from contractor PT Chevron Pacific Indonesia (CPI) to PHR. To keep the production of the Rokan block high and optimally maintained, a Head of Agreement (HOA) has been signed between SKK Migas and CPI on September 28, 2020," said Fatar.

    On the other hand, the Rokan PSC does not manage ASR backups. Thus, maintaining the production level of the Rokan WK is very dependent on the return of investment costs. The Head Of Agreement (HOA) agreement, it will guarantee the availability of ASR funds and the return of investment costs can be guaranteed. The number of drilling programs during the transfer of management at HOA was 192 wells.

"However, considering the existing developments, the drilling target has not been achieved. SKK Migas has coordinated with PHR to boost well drilling so that the 2021 production and lifting targets can be achieved," said Fatar.

    PHR President Director Jaffee Arizon Suardin expressed his gratitude for the support and contribution of SKK Migas in the transfer of the management process. With the support from SKK Migas, the transfer of management process is more certain and there is a guarantee, this can be seen from the current process which is felt to be very helpful when managed by PHR.

“Drilling is one of the efforts to maintain the production of the Rokan block, from the target of 192 wells that were previously conveyed by the Deputy Head of SKK Migas, which could not be realized by existing operators, PHR will continue, including the wells planned by PHR. We estimate that assuming 70 wells cannot be completed during the transfer of management, the number of wells that can be drilled until December 2021 will reach around 164 wells," said Jaffe.

    Jaffee said the Rokan Block is different from other blocks because it supports 24% of national oil production. And there are 104 fields spread from north to south.

“This is what we have to manage so that production can be maintained. There are nine priority areas of management transfer. We will continue what has not been completed, starting August 9, with the aim that by 2021 the number of wells will not be less than planned," said Jaffee.

    The former Deputy for Planning of SKK Migas also said that PHR would drill and prepare resources for 161 wells with the assumption that 77 wells had not been completed by the existing operator. Currently, preparations are ongoing. Pertamina has prepared around 16-17 rigs and materials. In fact, these rigs and materials can be used before August 9 to help the existing wells that are being worked on by the operator.

"The goal is that the transfer of management process can run smoothly without interruption," he said.

    According to Jaffee, Pertamina is committed to exploring all existing potentials massively, aggressively, and efficiently. And prepare not only wells to be drilled in 2021, but also in 2022.

“Not chasing the number of wells, we want the number of wells to be the least but the production to be the largest. In this block, many wells are needed,” he said.

    Meanwhile, the Secretary-General of IATMI who is also the President Director of PT Petrogas Jatim Utama Cendana Hadi Ismoyo highlighted the distribution of 10% Participating Interest / PI shares to regions through Regional Owned Enterprises (BUMD), including in the Rokan Block later.

“The challenges include the need for oil and gas professionals to implement 10% PI governance. BUMD managers must be slim and agile, as well as fast in making and processing strategic decisions," said Hadi.

    According to him, the current challenge is the fact that on the ground there are many 10% PIs for various reasons that have not been resolved or have not been given to BUMDs in accordance with the mandate of Ministerial Regulation 37, both for technical and non-technical reasons. 

    In addition, the socialization has not reached the root of the spirit of the 10% PI regarding the rights and obligations of each party. There is also a communication leak between operators and BUMD due to different levels of understanding.

Investor Daily, Page-10, Friday, July 23, 2021

Oil and Gas is Still the Mainstay

 

    The oil and gas industry sector is still relied on as one of the supports for depositing state revenues during the ongoing Covid-19 pandemic.

    In the midst of pressures that hit upstream Oil and Gas last year, the Oil industry was still able to provide deposits to the state worth Rp. 70.45 trillion in the form of non-tax state revenues (PNBP).

    This amount is still higher than PNBP from other non-oil and gas Natural Resources (SDA) sectors, namely minerals and coal. In the same period, the mineral and coal sector 'only' provided income to the state of Rp 34.63 trillion.

    Meanwhile, state income from the Oil and Gas sector comes from the state's share of the exploitation results after taking into account the government's obligations in upstream oil and gas business activities in accordance with contracts and provisions of laws and regulations. Income is also obtained from information services for potential auctions of oil and gas working areas and signature bonuses which are the contractor's obligation.

    This year, the dominance of deposits from oil and gas still dominates. The upstream oil and gas sector throughout the first semester of 2021 has supported US$ 6.67 billion or Rp. 96.7 trillion. The realization has even reached 91.7% of the year-long target set in the 2021 State Budget of US$7.28 billion.

Blogger Agus Purnomo in SKK Migas)

    Head of the Special Task Force for Oil and Gas (SKK Migas) Dwi Soetjipto said that the realization of state revenues could not be separated from oil prices which gradually improved after falling in 2020. With current achievements, Dwi believes state revenues from the upstream oil and gas sector by the end of 2021 will reached Rp. 154 trillion.

"ICP prices show an increase, even as of June 2021 reaching the US $ 70.23 per barrel. We will use this momentum optimally to encourage KKKS to be more aggressive in realizing operational activities," said Dwi.

    For your information, the 2021 State Budget sets the ICP assumption this year at US$ 45 per barrel so that the revenue target set has the potential to be exceeded long before the end of the year. Dwi added that the maximum state revenue is also an effort to optimize upstream oil and gas activities and costs. Activities carried out include selecting work order and maintenance priorities, as well as efficiency in operational activities, particularly due to activity restrictions.

"This effort succeeded in bringing the cost per barrel in the first semester of 2021 to US$ 12.17 per barrel of equivalent oil, lower than the first semester of 2020 of US$ 13.71 per barrel of equivalent oil," explained Dwi.

    Meanwhile, Energy Watch Executive Director Mamit Setiawan believes that the Oil and Gas sector is indeed the backbone of state revenue, both in terms of PNBP and taxes. Moreover, oil prices are in a very good position. According to Mamit, to keep this industry in good condition and attractive, there needs to be another relaxation by the government, especially from a fiscal perspective.

“If it is possible to foster an investment climate that leads to an increase in income, especially PNBP, there is nothing wrong with the government reducing its revenue. It is the same when the government makes a decision to reduce revenue when the gas price is US$6 per MMBtu,” he said.

    He added that the government needs to make a few sacrifices so that our investment climate is attractive and attractive compared to other neighboring countries such as Vietnam and Thailand.

"Besides that, I think legal certainty needs to be rushed in relation to the revision of the law which is currently unfinished," said Mamit.

    The founder of the ReforMiner Institute, Pri Agung Rakhmanto, assessed that if you want the Oil and Gas sector to be more useful, it doesn't need to always be directed as a PNBP producer. According to him, the Oil and Gas sector must first be encouraged to become an economic driver in a broad sense.

"From there, a multiplier effect will be generated for the movement of other related sectors, requiring labor which will ultimately increase tax revenue," he said.

ROKAN BLOCK

    In another development, PT Pertamina (Persero) through PT Pertamina Hulu Rokan (PHR) will drill as many as 161 wells after the transfer of management in the Rokan Block which will begin on August 9, 2021.

PHR

    Pertamina Hulu President Director Rokan Jaffee Suardin said in addition to the planned number of Wells drilling this year, his party would continue the drilling commitments that had been signed by PT Chevron Pacific Indonesia (CPI). 

PT Chevron Pacific Indonesia (CPI)

    Jaffee said that there will be an additional 77 Wells from CPI's commitment which will not be completed until the management transfer period on August 9th. In the previous target, Pertamina planned to drill only 84 wells for 2021.

"As of December 161 wells, the target production level is maintained and can increase," said Jaffee.

    According to him, PT Pertamina Hulu Rokan (PHR) has prepared the resources needed to realize the plan. To smooth the Wells drilling plan, as many as 16 to 17 rigs have been prepared. In addition, Jaffee said that human resources and supporting materials have been fully prepared so that when the transition period is over, all activities can start immediately.

“So the goal is that the transfer of management process will run smoothly without any disturbance. We have a target for the lifting to increase with a massive work program," he said.

    Deputy Head of SKK Migas Fatar Yani Abdurrahman said that CPI's failure to achieve drilling during the Rokan Block transition period was due to the difficulty of procuring the number of rigs. According to Fatar, CPI only has about 10 months from signing the investment commitment in the Rokan Block which was signed in September 2020. For the drilling, CPI should have required 10 rigs, but in practice, there are only 6 rigs available.

“Not to mention that the preparation for drilling will take 2 to 3 months. Therefore, we took the initiative to make one program only," he explained.

Bisnis Indonesia, Page-6, Friday, July 23, 2021

2022, Rokan Block Oil Production is Projected to Increase

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the Rokan Block oil production could be increased to 175-180 thousand barrels per day (BPD) in 2022 after the management shifted to PT Pertamina Hulu Rokan (PHR) in August this. The increase in production was obtained from Well drilling, and the implementation of advanced oil recovery (EOR).

Blogger Agus Purnomo in SKK Migas

    SKK Migas Deputy for Operations Julius Wiratno is optimistic that oil production in the Rokan Block can rise again despite the transfer of management. The reason is, even now, there are indications of an increase in production by doing well drilling during the operatorship transition period. In the ongoing discussion of the 2022 work plan and budget (WP&B), there are also indications that oil production will increase next year.

"The estimate may be that it will return to 175-180 thousand BPD, with massive development, of course, it will directly contribute to production and lifting," he said.

The Rokan Block by Chevron

    The implementation of Well drilling is one of the nine issues monitored by SKK Migas in the transfer of management of the Rokan Block. Until now, the realization of drilling development wells in the Rokan Block has reached 83 wells from the target of 180 wells this year. 

    Furthermore, the realization of work over (workover) wells as many as 40 wells from a target of 39 wells, and well services (well services) 5,135 activities from a target of 6,819 activities.

    In the following years, Julius also believes that the Rokan Block's oil production will continue to increase. The reason is that Pertamina will apply surfactant EOR technology in the block. The Plan of Development/POD for the implementation of EOR is targeted to be approved this year.

"We are working hard for the approval of this EOR POD so that it can be implemented immediately with suitable chemicals and can support it towards full scale as soon as possible," he said.

    He hopes that the implementation of EOR in Minas Field, Rokan Block can be successful. If successful, this step is expected to contribute to the production of the Rokan Block in 2023-2024.

"Perhaps this [Rokan Block] will be an example of an oil and gas block taken by Pertamina whose production does not decrease, but instead increases," said Julius.

    EOR implementation is also one of nine issues monitored by SKK Migas. So far, the data transfer and the conversional chemical EOR model have been completed. Meanwhile, the procurement of surfactant (surfactant chemical) to be used in EOR activities is still in process. 

    At the time of signing the Rokan Block contract, the implementation of EOR activities was also 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 stage-1 steam flood Kulin or Rantau Bais US$ 88.6 million.

Going Smoothly

    Regarding the transfer of management of the Rokan Block in August this year, the Head of SKK Migas Dwi is optimistic that it will run smoothly.

“The main issue, namely the migration of technical and operational data, has made 94% progress. So we are sure that it can be completed in August,” said Dwi.

    So far, the data catalog and verification have been completed, but they are still waiting for a review and BAP from the Data and Information Center (Pusdatin) of the Ministry of Energy and Mineral Resources. Next, he said the development of the Rokan Block contract management had reached 97%. 

    A total of 282 of the 290 existing contracts have completed the mirroring process. The procurement of materials for 192 has been completed, as well as the procurement of 4 rigs in progress and 3 rigs in the process of the farm in. The progress of electricity, steam, and gas supply has also reached 80%.

“Where PLN has made an agreement with PHR for the supply of electricity and steam. And PLN already has a sales purchase agreement (SPA) with MCTN," said Dwi.

    MCTN or PT Mandau Cipta Tenaga Nusantara is the owner of the power plant that supplies electricity to the Rokan Block. Regarding employment, 99% of workers have received offers from PHR, and the addition of 125 new positions in the PHR Employment Plan (RPTK). Next, the transfer of information technology has reached 83% where a total of 232 applications are needed. 

    In detail, 31 CPI applications were replaced by Pertamina applications, then of the 129 CPI applications that are still in use, 88 applications have been approved and 41 applications are under discussion, and 72 commercial applications are provided by PHR.

PHR

    Then, the licensing and operating procedures have reached 98%. Environmental Impact Analysis (EIA/Amdal) has been completed for two locations, and another location is still in process. In addition, 7,611 standard operating procedures (SOPs) have been submitted from CPI to PHR.

CPI

"Environmental issues are 100% complete, where the environmental audit and program have been prepared and are waiting for a clean declaration from the KLHK (Ministry of Environment and Forestry)," said Dwi.

    In principle, as many as 157 Environmental Function Recovery Plans (RPFLH) have been completed. The Rokan Block is one of the largest oil and gas blocks in Indonesia. However, the production of this oil and gas block continues to decline. Referring to SKK Migas data, in 2011, the Rokan Block still produced around 356.98 thousand BPD of oil or contributed 39.56% of the total national oil production at that time of 902.35 BPD. 

    However, last year, oil lifting in this block was only around 174,424 BPD or 24.62% of the total national oil lifting of 708,488 BPD. As of June, the realization of the Rokan Block production was recorded at 160,646 BPD or 97.4% compared to the lifting target of the State Budget (APBN) is 165 thousand BPD.

Investor Daily, Page-10, Thursday, July 22, 2021

Selling Oil and Gas Blocks, Owners Are Still Looking For Strategic Partners

    Sales of oil and gas blocks during the Covid-19 pandemic created challenges. Oil and gas investors who will leave continue to look for buyers who are currently still waiting and see.

    There are four oil and gas blocks that will be sold this year. Namely, Chevron's IDD Block, ConocoPhilips' Corridor Block, Inpex's Masela Block, and Pertamina's Rokan Block on August 9, 2021.

Blogger Agus Purnomo in SKK Migas 

    Head of Program and Communication of SKK Migas Susana Kurniasih revealed, the process of selling oil and gas blocks is still long. The latest update is a notification by ConocoPhilips for a permit request to the Directorate General of Oil and Gas, Ministry of Energy, and Mineral Resources (ESDM) to disclose data. So the process is still early, so far there has been no update on whether there is a follow-up process," said Susana.

    Although the process is ongoing, Susana ensures that activities in Field will continue as usual. Quoted from the official ConocoPhilips website, the participating shares in the Corridor Block are 54% owned by the USA company, the remaining 36% by Talisman, and 10% by Pertamina.

    In 2019, ConocoPhilips signed a gross split cooperation contract to continue the contract in the Corridor Block for 3 years from the end of the contract in 2023. This means that management will continue until 2026 before being continued by Pertamina.

Repsol

    In the new contract, there is a change in the number of participating shares with the composition of ConocoPhillips (Grissik) Ltd. (46%), Talisman Corridor Ltd. (Repsol) (24%), and PHE Corridor (30%). Participating Interest owned by the holders of interest includes 10% PI which will be offered to Regional Owned Enterprises.

    In addition to the Corridor Block, the oil and gas block divestment action is now taking place in two other blocks, namely Masela and Indonesia Deepwater Development. Of the three, only Block IDD will soon find a replacement partner. Chevron is said to be holding final point discussions with the Italian oil company, Eni.

Eni

    Meanwhile, the Rokan Block will also be sold. Pertamina is looking for a strategic partner. Executive Director of the National Oil and Gas Company Association (Aspermigas) Moshe Rizal said that the search for existing partners would likely affect operations. The current condition is not easy to find a replacement partner.

"Hopefully, after conditions improve, it can increase investment interest from outside, because I see that there are many incentives being prepared," said Moshe.

Kontan, Page-12, Thursday, July 22, 2021

SKK Migas Encourages Production of the Sakakemang Block Starting in 2023

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the development of the Sakakemang Block can be accelerated so that it can start production (onstream) in 2023. This target is faster than the Repsol proposal in 2024.

Blogger Agus Purnomo in SKK Migas

    SKK Migas Deputy Operations Julius Wiratno said Repsol as the operator of the Sakakemang Block, had completed the Front End Engineering Design/FEED. In its proposal, Repsol proposed the block to start operating in 2024. However, it sees an opportunity to accelerate the development of this block.

"We see that there are several opportunities that can be accelerated so that they can be onstream in 2023," he said.

Repsol

    One of them is that Repsol projected auction duration will take 9 months. After his party carried out an evaluation, it turned out that the auction period could be shortened, as well as the project execution period. In addition, optimization can also be done by procuring long lid items earlier.

    Currently, Repsol is working on an engineering, procurement, and construction package / EPC for the Sakakemang Block. So far, Repsol is still working on this oil and gas block according to the approved Plan Of Development/POD plan.

"They indicated a bit of a retreat, but we seized the opportunity to be brought forward again. It is currently under intense discussion and being monitored," he added.

    Separately, in the earnings call for Q1 2021, Repsol SA CEO and Executive Director Josu Jon Imaz San Miguel said that the POD approval allowed his party to start the monetization stage of the Sakakemang Block. His party targets the Final Investment Decision / FID for this project to be carried out at the end of 2021 or early 2022.

"With first gas two years later," he said.

    If the FID is completed by the end of this year, the Sakakemang Block can enter the production stage in 2023. However, if the FID is delayed until next year, the project operation could shift to 2024. Imaz added that his party also plans to work on a CO2 injection project in the Sakakemang Block. However, the plan is still under negotiation with the government.

“We are negotiating the terms of this injection plan. If it is agreed, we will be able to launch the project,” he said.

Sakakemang Block Repsol

    The first POD of the Kaliberau Field, Sakakemang Block was approved by the government on December 29, 2020. According to this POD, gas reserves produced amounted to 445.10 billion cubic feet (gross) until the project's economic deadline in 2038 or equivalent to gas sales of 287.7 billion feet. cubic feet with a peak production rate of 85 million standard cubic feet per day/MMScfd. 

    Meanwhile, the cumulative condensate production is 0.17 million barrels with a peak production rate of 34 barrels per day (BPD). Furthermore, the investment cost for the development of the field is estimated at US$ 359 million.

    This project includes the re-entry of the KBD-2XST1 well into a production well, drilling and completion of 1 infill well as a production well, construction of a Wellpad facility, as well as the construction of a number of production support facilities such as a flowline from the Wellpad to the existing Grissik Central Gas Plant (GCGP) in the Corridor Block. , through part of Right of Way (ROW) in Jambi Merang Block and modification of existing equipment and installation of new equipment at GCGP.

    Repsol SA discovered gas reserves in the Sakakemang Block, South Sumatra with an estimated reserve of at least 2 trillion cubic feet through drilling the KBD-2X Well in early 2019. In the Sakakemang Block, Repsol has a 45% Participating interest/PI as well as an oil block operator. Meanwhile, its partner, Petronas, has a 45% participating interest and 10% MOECO.

Investor Daily, Page-10, Wednesday, July 21, 2021