Three Upstream Oil and Gas Projects Ready to Onstream

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

Blogger Agus Purnomo in SKK Migas

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

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

Blogger Agus Purnomo in Petronas Carigali Ketapang

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

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

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

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

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

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

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

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

PEPC

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

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

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

Termination Block Managers Can Propose Changes in the Form of Oil and Gas Contracts

    Oil and gas companies that hold the management of terminated oil and gas blocks are allowed to propose changes in the form of production sharing contracts (PSC) from gross profit sharing (gross split) to cost recovery or vice versa.

ESDM

    This refers to the Regulation of the Minister of Energy and Mineral Resources (EMR/ESDM) Number 23 of 2021 concerning the management of oil and gas blocks whose cooperation contracts will expire. With the enactment of this regulation, the Minister of Energy and Mineral Resources Regulation No. 23/2018 and the Minister of Energy and Mineral Resources Regulation No. 3/2019 are revoked and declared invalid.

    In Article 34 of Ministerial Regulation number 23 of 2021, it is stated that contractors and PT Pertamina (Persero) can apply for proposals for the basic forms and provisions of PSC from gross split to cost recovery or from cost recovery to gross split. This application can be made after the contractor and Pertamina have completed a five-year definite work commitment (KKP).

Blogger Agus Purnomo in SKK Migas

    The application is submitted to the Minister of Energy and Mineral Resources through the Special Task Force for Oil and Gas Business Activities (SKK Migas). Furthermore, if there is a change in the form and basic provisions of the PSC, the costs incurred for the implementation of the KKP cannot be submitted as a refund of operating costs.

    The opportunity to change the PSC scheme is considered positive by various parties, including PT Pertamina Hulu Energi (PHE) as the Upstream Subholding of PT Pertamina (Persero). Pertamina Hulu Energi Corporate Secretary Whisnu Bahriansyah said the option to choose the gross split or cost recovery oil and gas contract was previously only given for new oil and gas block contracts. This provision is through the Regulation of the Minister of Energy and Mineral Resources number 12 of 2020.

    But now, the same option is also owned by the terminated oil and gas block manager who has signed a contract. "Article 34 answers the industry's encouragement for the flexibility of the existing cooperation contract scheme options," he said.

    Secretary-General of the Indonesian Association of Petroleum Engineers (IATMI) Hadi Ismoyo agrees that this flexibility in choosing the form of PSC has a positive impact on the national oil and gas investment climate. 

    The reason is, so far not all investors are compatible with the gross split PSC. He said that the implementation of the gross split contract had an impact on the cash flow of oil and gas companies. This is because cost recovery PSCs are guaranteed a faster return on investment than gross split PSCs.

"So that investors are more comfortable, and because investors feel comfortable, it can also be returned in the form of exploration activities in the area, so that in the long term there is hope for sustainable production," he said.

    The Executive Director of the Reforminer Institute, Komaidi Notonegoro, also said the same thing. The no longer mandated gross split scheme oil and gas contracts for terminated oil and gas blocks is a positive step. His party from the beginning has also suggested that KKKS be given the freedom to have the most suitable oil and gas contracts for the oil and gas blocks they manage.

"Because there are types [of oil and gas blocks] that are suitable for cost recovery and some are suitable for gross split, so they cannot be mandated for certain types," he explained.

    Regarding the implementation of the Ministerial Regulation, the Head of the Program and Communication Division of SKK Migas Susana Kurniasih said, the PSC that first regulated the KKP matter was for the Jambi Merang Block which became effective in 2019. With the implementation period of the KKP for five years, it will be completed in 2024.

“SKK Migas through functions that have main tasks, functions, and competencies will monitor the implementation of the KKP by KKKS. In the event that after the completion of the KKP, the contractor intends to apply for a change in terms and conditions, then the policy to decide on the application is entire with the Minister of Energy and Mineral Resources,” She said.

    She added that SKK Migas had submitted a recommendation on an application from the Brantas Block contractor who submitted a contract change from gross split to cost recovery before the enactment of ESDM Ministerial Regulation number 23 of 2021.

"However, the application in question was not approved by the Minister of Energy and Mineral Resources," said Susana.

    Previously, termination of oil and gas blocks was mandated using a gross split contract. To date, referring to data from the Ministry of Energy and Mineral Resources, there are 23 terminated oil and gas blocks that use gross split contracts, namely the Offshore North West Java (ONWJ), North Sumatra Offshore, Ogan Kome ring, South East Sumatra, Tuban, Sanga-Sanga, East Kalimantan. and Attaka, Jambi Merang, Raja/Pendopo, Bula, Seram-Non Bula, Malacca Straits, Brantas, Salawati, Bird's Head, Rokan, Tarakan, Coastal Plains and Pekanbaru (CPP), Tungkal, Sengkang, Rimau, Corridor, and Pangkah.

Investor Daily, Page-10, Monday, Aug 23, 2021

The Transfer of Managing the Rokan Block is Smooth

    Transferring the Rokan Block management from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan (PHR), which went smoothly, could be an example of the operational transition of a giant oil and gas working area in the future.

the Rokan Block by Chevron

    Meanwhile, the smooth transfer of management in the Rokan Block is of particular concern considering that the working area is the second-largest supporter of oil production in Indonesia or around 24 percent of the total domestic oil production.

    Investment commitment agreements during the transition period are a new thing in the process of transferring the management of oil and gas working areas in Indonesia. The Rokan Block became the only working area that received investment for drilling during the transition period by its former manager.

Blogger Agus Purnomo in SKK Migas

    The day after the transfer of management of Rokan, Pertamina Hulu Rokan succeeded in continuing the drilling program that had been prepared during the transfer of management with SKK Migas and Chevron. PT Pertamina Hulu Rokan (PHR) also shipped the prime oil at the end of last week. Most recently, Pertamina Hulu Rokan drilled the sixth well, namely the Duri #3R-52B well.

PT Pertamina Hulu Rokan (PHR)

    President Director of PT Pertamina Hulu Rokan (PHR) Jaffee Arizon Suardin said a week after managing the Rokan Block or one day before the commemoration of Indonesian Independence Day, the drilling was carried out.

"There is a rig preparation work which is usually completed in six days, can be completed in three days," said Jaffee.

    Meanwhile, Executive Director of ReforMiner Komaidi Notonegoro assessed that the main key to creating a smooth transition process lies in institutional strengthening to accelerate the transfer process of the two contractors.

"If SKK Migas later becomes an institution with a strong representation, then it will know the data, know the detailed information," he said.

    In addition, Komaidi assesses the role of legal protection will also greatly determine similar processes in the future. Therefore, he hopes that the presence of the new Oil and Gas Law will make all affairs in the sector more effective.

Bisnis Indonesia, Page-5, Wednesday, Aug 18, 2021

Rokan Block Production Targeted to Reach 400 Thousand BPD

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) targets the Rokan Block oil production under PT Pertamina Hulu Rokan (PHR) to reach 400 thousand barrels per day (BPD) by 2030. This oil and gas block will support around 40% of the national oil production target of 1 million BPD in the same year.

Blogger Agus Purnomo in SKK Migas

    Secretary of SKK Migas Taslim Z Yunus said that before transferring the Rokan Block, Pertamina had conducted a study of the oil and gas block and submitted a work program proposal to the government. This proposal then made Pertamina chosen to be the manager of the Rokan Block after the contract was completed on August 9, 2021.

    His party and PHR already have a long-term strategy to optimize the production of the Rokan Block. With the transfer of management running smoothly, one thing that must be ensured in the future is that the work program is realized.

"In the end, how can production be increased from 165,000 to 400,000 BPD by the end of 2030," he said in the Energy Corner of CNBC TV Indonesia.

    For the short term, the mapping will be carried out for the production target that has been set for an average of around 165 thousand BPD. Furthermore, in the medium term, the strategy is to increase oil production and investment significantly. 

    Some of the projects that will be worked on are the monetization of the potential in the Telisa formation, optimization of production by injection of water (waterflood) and steam flood, as well as Enhanced Oil Recovery (EOR) by injection of surfactant in Minas Field in 2024-2025.

“For the long term, full-scale EOR chemical [implementation] for other fields, undeveloped and exploration monetization, and non-conventional oil and gas potential monetization. This is what is interesting to develop in the Rokan Block,” said Taslim.

    These programs are in accordance with the definite work commitments (KKP) promised by Pertamina worth US$ 500 million or around Rp. 7.2 trillion. Some of the activities that will be funded by this KKP are an EOR study worth US$ 4 million, drilling 11 exploration wells at US$ 69.8 million, drilling five Telisa wells at US$ 18.1 million, stage-1 CEOR 7 pattern US$ 247 million, and stage-1 steam flood Kulin or Rantau Bais US$ 88.6 million.

    From the aspect of drilling development wells, he said it would continue to rise in the future. This year, Pertamina will drill a total of 161 wells. Next year, the number of wells drilled will increase to 500 wells. In the following years, the number of wells drilling will be maintained depending on the evaluation results of several oil and gas fields in the Rokan Block.

Nicke Widyawati

    Previously, Pertamina President Director Nicke Widyawati said that she had prepared a budget of up to US$ 2 billion for investment in the Rokan Block until 2025. This budget will be used to fund planned programs, including EOR projects and the development of unconventional oil and gas potential.

Support 40%

    Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM) Tutuka Ariadji emphasized that the Rokan Block has a significant contribution to achieving the national oil production target of 1 million BPD in 2030. 

the Rokan Block Chevron

    Currently, the contribution of oil and gas block production is estimated to reach 24-24 30%. However, this contribution will increase with the development of unconventional oil and gas potential and untapped resources, as well as EOR projects.

"The hope is that from the initial target, the contribution will be even greater," said Tutuka.

    If the 400 thousand BPD oil production target is realized by the end of 2030, Taslim added, the Rokan Block will contribute up to 40% of the 1 million BPD target.

"Therefore, we hope that the projects that have been proposed by Pertamina can be implemented and there are no licensing barriers," he said.

    Along with the increase in oil production, Tutuka also hopes that the contribution of the Rokan Block to state revenues will increase. In recent years, it is acknowledged that the contribution of state revenues from this oil and gas block has continued to decline due to various things, one of which is the Covid-19 pandemic. In fact, in 2016-2018, its contribution continued to rise.

Investor Daily, Page-9, Saturday, Aug 14, 2021

After Block Rokan Returns to Indonesia

    After 97 years in the hands of PT Chevron Pacific Indonesia (CPI), the Rokan Block is finally managed independently by Indonesia starting August 9, 2021. The oil and gas block located in Riau Province is now managed by PT Pertamina [Persero] through its business unit, PT Pertamina Hulu Rokan [PHR].

PT Pertamina Hulu Rokan [PHR]

    The Rokan Block is one of the three largest oil blocks that support national oil and gas production. Until the first semester of this year alone, Blok Rokan supports 24 percent of national oil and gas production. According to SKK Migas records, the Rokan Block's production reached 160,646 barrels per day. In fact, the Rokan Block is an old oil field that has been operating for almost a century.

Blogger Agus Purnomo In SKK Migas

    However, in addition to the still large production, around the oil and gas field, there are still potential reserves that can be developed. Since May 2019, the government has officially handed over the rights to manage the Rokan Block to Pertamina. Two years before Chevron contract period ended, various efforts were made by the two companies to make the transition to management. President Joko Widodo [Jokowi] welcomed the transfer of management of the Rokan Block to Pertamina.

President Joko Widodo [Jokowi]

"Congratulations on the return of the management of the Rokan Block to Indonesia and congratulations on working for the entire team from Pertamina," Jokowi said in a statement videos uploaded by Pertamina through their social media accounts.

    Jokowi said the transfer of management of the Rokan Block was a challenge to prove Indonesia's capabilities. Therefore, he also advised that the productivity of the Rokan Block would not decrease after being managed by Pertamina.

"Don't let the productivity of the Rokan Block decrease even after we manage it ourselves," he said.

    The President asked Pertamina to work hard to maintain the sustainability of the Rokan Block as a support for national oil production and increase benefits for the region. Jokowi believes Pertamina is capable of managing the Rokan Block.

the Rokan Block Chevron

    One day after the Rokan Block was officially managed by Pertamina, SOE Minister Erick Thohir directly inspected the Rokan Block. Erick visited Central Gathering Station ll), Duri Steamflood [CGS ll) DSP), Dori, Bengkalis. 

Erick Thohir 

    Erick Thohir reviewed the utilization and recycling of produced water in a high-tech and environmentally friendly steam flood system. The facility at CGS II is also the largest for the Duri field by processing 200 thousand barrels of fluid per day and oil production of around 19 thousand barrels per day. day.

    During the visit, Erick also had a dialogue and gave motivation to the workers, he also appreciated the number of CPI workers who joined PHR.

"I really appreciate you with open arms, 98 percent of them have joined. Let's work together to improve SOEs," said Erick.

    Erick wants the Rokan Block to increase production, especially for state income. In addition, PHR is also expected to provide public services that have an impact on the welfare of the community.

 "What's interesting is that we [SOEs] also run public services, one of which is through CSR, especially at this time for handling Covid-19," said Erick.

Nicke Widyawati

Eco Friendly

    Pertamina President Director Nicke Widyawati when accompanying Erick Thohir to visit the Rokan Block also explained Pertamina's business vision to PHR workers. Nicke said Pertamina wanted an energy transition from fossil fuels to New and Renewable Energy [EBT]

"Therefore, we must focus on changing our operations towards being more environmentally friendly," said Nicke.

    According to Nicke, Pertamina has made a number of efforts in responding to the energy transition for business continuity in the future. One of these efforts is to integrate refineries with petrochemicals.

"We will enter petrochemicals whose growth will continue to increase. In the last five to 10 years, the growth was 3.5 percent and is predicted to increase to 5.5 percent per year. So, we will switch from fuel to petrochemical-based on the oil we have,” said Nicke.

    The Rokan Block stretches across five regencies in Riau Province, namely Bengkalis, Siak, Kampar, Rokan Hulu, and Rokan Hilir regencies. This strategic oil block is the second largest in Indonesia with an oil production target of around 165,000 barrels per day in 2021 or around 24 percent of production. national.

    Pertamina has expressed its commitment to maintaining production after the transfer of management by carrying out predetermined drilling in the period August-December 2021 as many as 163 wells. The total consists of 84 new wells and 77 ex-Chevron wells. Next, in 2022, It is planned that there will be an additional 500 wells.

    Nicke previously emphasized that Pertamina would strive to maintain the production of the Rokan Block. Pertamina will carry out an advanced oil recovery (EOR) project to carry out aggressive drilling.

    Pertamina has allocated US$2 billion by 2025. This fund will be used by Pertamina for drilling, development, and maintaining production. Nicke added that Pertamina is also committed to exploring the Rokan Block because there are still potential reserves that can be developed.

"There are still many non-conventional fields that can be developed to support national production," said Nicke.

    Not only the Rokan Block who returned to Indonesia. One of the large power plants in Rokan which also supplies steam in the Rokan Block, namely the Mandau Cipta Power Nusantara (MCTN) Power Plant, has been officially managed by PT PLN (Persero)."

    For PLN, this is proof that we are able to manage power plants to meet electricity needs in large-scale oil and gas working areas, such as the Rokan Block," said PLN President Director Zulkifli Zaini.

    To ensure the supply of electricity and steam in the operation of the Rokan WK, PLN and PHR have agreed and signed a power and steam sale and purchase agreement (PJBTLU) on February 1, 2021. During the transition period, PLN utilizes existing power plants that will last for three years. PLN has acquired shares of the existing power plant which has been electrifying WK ​​Rokan, namely PLTG North Duri Cogen 300 MW and supported by PLTG Minas and Central Duri of 130 MW

"In the short term, we will use electricity from the generator, which has been supplying electricity to Rokan, while for the past three years we have prepared the electricity network to connect the Rokan WK with the Sumatra electricity system," said Zulkifli.

    In the second phase, the permanent service period will rely on PLN's generators and network starting in 2024. PLN will interconnect the Rokan Block system with the Sumatran electricity system with a capacity of 400 megawatts (MW).

Republika, Page-1, Thursday, Aug 12, 2021

Officially Working on Rokan Block, Pertamina Distributes US$ 2 Billion Investment

    PT Pertamina (Persero), through PT Pertamina Hulu Rokan (PHR), officially holds the management of the Rokan Block starting August 9 at 00.01 WIB. To increase the oil production of this block, the company plans to invest up to US$ 2 billion until 2025. The increase in production of the Rokan Block is to support the targets of 1 million barrels per day (BPD) and 12 billion standard cubic feet per day/BSCFD by 2030.

"Pertamina has set an investment budget until 2025 of US$ 2 billion," said Pertamina President Director Nicke Widyawati at the Rokan Block Management Transfer Ceremony.

Nicke Widyawati

    According to Nicke Widyawati, her party sees the Rokan Block still as unconventional oil and gas potential to increase national oil and gas production. Nicke affirmed his commitment to maintaining the Rokan Block's oil production. 

PT Chevron Pacific Indonesia (CPI)

    Her party will continue the drilling activities that have been started by PT Chevron Pacific Indonesia (CPI) as the previous operator. To prevent this block's oil production from falling, it will drill 161 wells this year and an additional 500 wells next year. It will also continue its advanced oil recovery (EOR) activities.

    On that occasion, the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said the management transfer of the Rokan Block was prepared long ago so that oil production from this block would not decrease. In addition, with a mutual agreement during the management transfer period, the production of this oil and gas block in Riau is expected to continue to increase. 

    Increasing production must be Pertamina's commitment. Moreover, the Rokan Block is one of the largest blocks in Indonesia that has strategic value in achieving the oil production target of 1 million BPD and 12 BSCFD gas by 2030.

“This goal will be realized if PHR invests in drilling massively. Therefore, it is hoped that PHR will propose an aggressive production increase for the remainder of 2021 and the following year," 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 explained that his party had been preparing to manage this block two years ago. One of the things that his party strives for is to initiate a Head of Agreement (HoA) which guarantees CPI investment at the end of the contract period. 

    As a result, Chevron managed to drill 103 development wells until the last second of management switching. Thus, the transfer of management runs smoothly and the level of oil production until the contract expires can be maintained.

the Rokan Block Chevron

"This is an important matter for the nation and the state considering that the Rokan Block currently still supports 24 percent of national production and is expected to remain Indonesia's mainstay work area," said Dwi Soetjipto.

    Riau Governor Syamsuar also requested that PHR be able to maintain the production of the Rokan Block.

“We welcome PHR who has been given the mandate to manage the Rokan Block. Hopefully, it will not be the same as the Mahakam Block in Kalimantan," said Syamsuar.

    Chevron IndoAsia Business Unit Managing Director & Chevron Pacific Indonesia President Director Albert Simanjuntak appreciates the collaboration with SKK Migas and Pertamina that has been carried out during the transition period, so that the transfer of management takes place safely, reliably, and smoothly.

"Hopefully the Rokan Block can continue to give its best contribution to the nation and state," said Albert.

    This year, the Rokan Block oil production is targeted at 165 thousand BPD with a realization of 160,646 thousand BPD or 97.4% of the target at the end of June. Next year, SKK Migas projects the oil production of this block to increase to 175,180 thousand BPD. Currently, the Rokan Block is the second-largest oil producer in Indonesia.

Regional Contribution

    With the transfer of the management of the Rokan Block to PHR, Syamsuar asked Pertamina to commit to contributing from the block's production to state revenue and regional revenue sharing. Therefore, not only increasing production, PHR must produce oil in the Rokan Block with more efficient production costs.

    In addition, Syamsuar charges a 10% participating interest (PI) for Regional Owned Enterprises (BUMD) as stated in the Decree of the Minister of Energy and Mineral Resources.

"The process of transferring the 10% PI must be carried out immediately in the shortest possible time," said Syamsuar.

    He also asked that PHR could involve local participation in its oil and gas operations. This means that PHR must provide the widest possible opportunities for BUMD and local companies in the field of construction services and manpower.

    In this case, Pertamina is also expected to limit itself to using its subsidiaries in its operational activities. Syamsuar also advised that PHR should synergize with local governments to implement corporate social responsibility (CSR) programs, by empowering local communities and involving local universities.

    In addition, he also urged that PHR can help solve the problem of soil contaminated with oil. One of them is by involving the local government and related communities and the authorities in a not so long period of time.

"Besides that, it also helps solve the problem of contaminated land by involving local governments, in the not too distant future," said Syamsuar.

Pertamina Hulu Rokan (PHR)

    As is known, based on the Decree of the Minister of Energy and Mineral Resources Number 1923 K/10/MEM/2018 dated August 6, 2018, the government has decided Pertamina through its affiliate Pertamina Hulu Rokan (PHR), as the manager of the Rokan Block after August 8, 2021, with participating interest (Participating Interest). 

    PI) of 100%, including the 10% share belonging to the region. The cooperation contract/PSC of this block was signed by PHR and SKK Migas on May 9, 2019, using a gross split scheme. This contract is effective starting August 9, 2021, with a contract period of 20 years.

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

Pertamina Directly Steps on Gas Working on Rokan Block

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that PT Pertamina Hulu Rokan (PHR) could immediately move quickly to work on the Rokan Block, including wells drilling after its management shifted from PT Chevron Pacific Indonesia (CPI). PHR officially holds the management of the Rokan Block starting August 9 at 00:01 West Indonesia Time (WIB).

Blogger Agus Purnomo in SKK Migas

    Deputy of Planning for SKK Migas Benny Lubiantara said the progress of the transfer of management of the Rokan Block until Saturday (August 7) ​​was quite good. The smooth transition of the management of the Rokan Block is important considering that the contribution of this oil and gas block to the national oil lifting is quite significant. 

    One of the activities that must be ensured continuity is the drilling of development wells in the Rokan Block. He explained, with the agreement that has been made, the drilling of the wells program by Chevron will continue until the management of the Rokan Block shifts to PHR.

The Rokan Block By Chevron

"As soon as August 9 arrives, PHR can also immediately step on the gas, because preparations for drilling have been carried out together at the beginning," he said.

    As of Friday (August 6), referring to SKK Migas data, Chevron has successfully drilled 103 wells. Furthermore, the technical and operational data migration can be completed after CPI and PHR sign the minutes. The management of contracts needed to support operations has also been completed, among others by mirroring previous contracts so that the goods and services needed have been contracted.

PT Chevron Pacific Indonesia (CPI)

    The supply of electricity and steam is also safe after Pertamina signed a contract with PT PLN (Persero), including the procurement of gas for power plants. The licensing process and operating procedures have also been completely transferred so that they can be used by PHR. Environmental problems have also been agreed upon so that they can be resolved properly. Employment issues can also be resolved where most of the CPI workers are transferred to PHR.

PT Pertamina Hulu Rokan (PHR)

    President Director of Pertamina Hulu Rokan (PHR) Jaffee A Suardin said, as of Saturday (August 7), the preparation for the transfer of management of the Rokan Block had reached 99.5% of which 9 transition programs had been realized.

"The transfer of management of the Rokan Block will be 100% and effective when it officially switches on August 9, 2021, at 00.01 WIB," he said.

    He is optimistic that he can maintain and continue to operate the Rokan Block after the operatorship shifts from Chevron to PHR. For the drilling program, PHR will drill 84 wells and take over the CPI drilling plan of 77 wells. So, in total, his party will drill 161 wells during August-December 2021.

"We will do our best to maintain and continue to carry out massive operational activities to increase oil and gas production so that we can meet the national target of 1 million barrels per day (BPD) in 2030," said Jaffee.

    Jaffee added that in the Rokan Block, PHR will later manage a working area with an area of ​​​​about 6,453 square kilometers (km2) with 10 main fields, namely Minas, Duri, Bangko, Bekasap, Balam South, Kotabatak, Farmers, Pematang, Petapahan, Pager.

Production Up

    Under the management of Pertamina, SKK Migas projects that the production of the Rokan Block will increase. This year, the Rokan Block's oil production is targeted at 165 thousand bpd with a realization of 160,646 thousand bpd or 97.4% of the target as of the end of June. Next year, SKK Migas projects the oil production of this block to increase to 175,180 thousand bpd. To maintain production, Benny hopes that Pertamina has a more massive drilling program.

"We hope that through drilling more massive wells later by PHR, the Rokan Block production target can be achieved, maybe even surpassed. And production will start to increase at the end of this year," he said.

    In addition to drilling, the implementation of an enhanced oil recovery (EOR) program with chemicals is also expected to boost the production of the Rokan Block. Referring to SKK Migas, so far, studies related to EOR activities with chemical injections can be completed more quickly, so that dynamic studies have also been successfully completed. His party targets the approval of the plan of development (POD) for this EOR activity to be obtained this year.

"The discussion on the subsurface aspect has been completed, by the end of this year, hopefully, the POD will be completed so that the progress is expected to be on schedule," said Benny.

 Investor Daily, Page-17, Monday, Aug 9, 2021

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

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

rig Soehanah

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

Blogger Agus Purnomo in Petronas Carigali Ketapang

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

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

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

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

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

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

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

Blogger Agus Purnomo in SKK Migas

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

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

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

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

SKK Migas Encourages Completion of Goods and Services Contracts

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) continues to oversee the transfer of management of the Rokan Block, including contracts mirroring for the procurement of goods and services. This process must be completed immediately to keep the Rokan Block's oil production from decreasing after changing operators.

PT Chevron Pacific Indonesia (CPI)

    To ensure that matters related to the contract for the procurement of goods and services run smoothly, SKK Migas together with PT Chevron Pacific Indonesia (CPI) and PT Pertamina Hulu Rokan (PHR) held an online vendor day. This activity was attended by more than 550 providers of goods and services.

Blogger Agus Purnomo In SKK Migas

    Acting Deputy for Procurement Control of SKK Migas Rudi Satwiko said the activity was part of an effort to ensure contracts and supplies continued smoothly during the transfer of management of the Rokan Block from CPI to PHR. This is important considering that the Rokan Block has very promising potential and can become one of the backbones to achieve the production target of 1 million BPD in 2030.

"The smooth transfer of management requires support from various parties, including the providers of goods and services in the Rokan Block," he said.

    According to Rudi Satwiko, since its first production in 1951, the Rokan Block has contributed to development for 70 years. This block once reached its peak of glory with oil production reaching more than 700 thousand barrels per day (BPD). Even now, this oil and gas block is still a mainstay with oil production of around 160 thousand BPD.

"The Rokan Block has contributed an average of 46 percent to national oil production, although currently, its production has decreased to 24 percent of national production," said Rudi.

    Vice President Procurement & Contract of CPI Sigit Pratopo said that his party is committed to maintaining optimal operations of the Rokan Block, including the provision of goods and services by vendors. During the preparation of contract termination and transition to PHR, his party has submitted data and information to SKK Migas and PHR which includes copies of contracts and purchase orders (PO) for contracts mirroring, copies of local vendor contracts, inventory data, and warehouse management processes.

"After the transition, CPI will continue to provide support, including continuing the process of closing contracts and POs to ensure the fulfillment of the obligations of partners providing goods and services and processing invoices for contracts and POs under the CPI entity," said Sigit.

    PHR's Business Support Project Leader Danang Ruslan Saleh explained that contracts mirroring will ensure the sustainability of contracts that have been signed when vendors become CPI partners. From a total of 379 active contracts, his party determined 318 contracts according to PHR needs and continued with the contracts mirroring process. Currently, his party has completed mirroring for 298 contracts with 4 contracts in the amendment process.

PHR

"The amendment to the contract for the provision of drilling is related to the number of drilling activities that will be added by PHR after the transfer of management so that it requires more rigs than the number in the existing contract," he said.

    Head of the Division of Supply Chain Management and Cost Analysis of SKK Migas Erwin Suryadi said, to ensure that the issue of the procurement contract for goods and services was immediately resolved, his party revised the Work Procedure Guidelines number 007 James Bond, (PTK 007) by including contract mirroring terminology. 

    This step is to maintain the continuity of the supply of goods and services so that PHR can prepare everything, including the supporting infrastructure. Thus, oil production in the Rokan Block will not decrease.

the Rokan Block by Chevron

“Contract mirroring for 1 year is not part of the project. As of August 17, 2021, PHR will have joined the centralized integrated vendor database (CIVD) to make it easier for vendors and PHR to provide goods and services in accordance with existing regulations," said Erwin.

Engaging Region

    Danang added that PHR will continue the Local Business Development (LBD) activities that have been initiated by CPI. In addition to the contract, currently PHR has prepared a work order for the next month so that after the transfer of management there will be no problems in providing goods and services to support the operations of the Rokan block.

"We are finalizing the list of owner contracts required by providers of goods and services when PHR has officially operated the Rokan block," said Danang.

    SKK Migas encourages this Local Business Development (LBD) program. The reason is, this program has a positive impact on local entrepreneurs. As of May 2021, for 11 years, LBD contracts reached Rp 1.27 trillion for 5,055 contracts requiring 40,400 workers. Therefore, his party asked PHR to increase the number of parties involved in various regions in Riau which currently consists of 14 rings in 1 area with 699 active LBD.

"Hopefully the number of LBD can be increased so that the benefits for the people of Riau will be greater," said Erwin.

    The management of the Rokan Block will switch from CPI to PHR on 9 August. As one of the mainstay oil and gas blocks, SKK Migas projects that the Rokan Block's oil production will increase to 175-180 thousand BPD in 2022. As of June, the realization of Rokan Block's production was recorded at 160,646 BPD or 97.4% compared to the lifting target in this year's APBN 165 thousand BPD.

Investor Daily, Page- 10, Thursday, Aug 5, 2021