SKK Migas Take Advantage of the Time Left

    Although less than 10 years are left, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that it would continue to strive for oil production of 1 million barrels per day and 12,000 MMscfd of gas by 2030. 

Blogger Agus Purnomo in SKK Migas

    Head of Program Coordinator for the 2nd International Convention on Indonesian Upstream Oil and Gas 2021 Rikky Rahmat Firdaus said that the 2030 target is a big challenge for the upstream oil and gas sector in the next 9 years.

"Nine years isn't that long actually. To obtain oil and gas, it requires survey activities to drill. This will take time, so we must carry out activities from now on to achieve these targets,” he said.

    SKK Migas and cooperation contract contractors (KKKS) have made a number of efforts to achieve this target. First, optimizing production from existing fields and maintaining existing production.

"The current state budget in 2021 will reach 705,000 barrels per day. This target alone is already a challenge," he added.

    Second, chemically enhanced oil recovery (EOR) to obtain new oil reserves. Most recently, SKK Migas approved the plan of development (POD) for the Ubadari Field and Vorwata Enhanced Gas Recovery (EGR) in the Berau, Muturi, and Wiriagar working areas operated by BP Berau Ltd. This agreement resulted in additional reserves of 1,523 Bscf of gas or equivalent to 271.96 million barrels of oil.

BP Berau Ltd

“Furthermore, third, increasing oil and gas exploration with planned and in-depth and efficient studies. Then the G&G survey that we are doing with KKKS is carried out," he explained.

Energy and Mineral Resources (ESDM)

    Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM) Tutuka Ariadji stated that special steps were needed to achieve the oil and gas production target.

"If efforts are not made to prevent production from falling, by 2030, oil production could only be around 300,000 barrels per day. The strategy needs to be taken seriously," said Tutuka.

    Meanwhile, the government also stated that the development of oil and gas infrastructure will still be aggressive in the future. This is to support the increase in production that has been planned to meet domestic supply.

    Tutuka said there are 42 upstream oil and gas projects in Indonesia for the period 2021 to 2027 which are expected to produce 1.1 million barrels of oil equivalent per day with an investment of around US$43.3 billion.

Bisnis Indonesia, Page-4, Thursday, Nov 18, 2021

Jambaran-Tiung Biru Project Potentially Delayed to 2022

    The Jambaran Tiung Biru (JTB) project has the potential to be operational next year, from the initial target for completion by the end of 2021. However, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is still trying to get the project completed soon.

Blogger Agus Purnomo in SKK Migas

    SKK Migas Deputy Operations Julius Wiratno said his party was still pursuing the completion of three additional upstream oil and gas projects this year, one of which was the Jambaran-Tiung Biru (JTB) Field Unitization Project. However, the completion of the project worked on by PT Pertamina EP Cepu (PEPC) has the potential to be delayed to next year.

PT Pertamina EP Cepu (PEPC)

“JTB which seems very difficult to onstream (operations) this year. There is a possibility [of withdrawing]," he said.

the Jambaran-Tiung Biru Project

    Currently, the development of the Jambaran-Tiung Biru Project has reached 95%. However, even if the progress of this project can reach 98-99%, the possibility of starting operations this year is still very difficult.

"But we still try as much as possible," said Julius.

the Jambaran-Tiung Biru Project

    Previously, the work on the Jambaran-Tiung Biru Project was affected by the Covid-19 pandemic. However, as of last June, SKK Migas is still optimistic that the gas project with a production of 192 million standard cubic feet per day/MMscfd will start operating this month. Moreover, the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif and the Head of SKK Migas Dwi Soetjipto have directly reviewed the work on this project.

    The JTB project includes the construction of a gas processing facility/GPF and its supporting facilities, as well as drilling six development wells and one plug and abandonment well. By optimizing the GPF design, the salable gas production from this project can be increased from 172 MMscfd to 192 MMscfd.

    This gas production will be channeled through the Gresik-Semarang transmission pipeline owned by PT Pertamina Gas (Pertagas). Pertamina has signed the Jambaran-Tiung Biru gas sale and purchases agreement (PJBG) with PT PLN (Persero). Gas from the Jambaran-Tiung Biru project will be channeled to PLN of 100 MMscfd and the remaining 72 MMscfd for the industry in Central Java and East Java.

    Besides JTB, two other projects targeted for completion this year are the SP Bambu Besar (Asso) Project by PT Pertamina EP and Bukit Tua Phase 3 by Petronas Carigali Ketapang II Ltd. The SP Bambu Besar project is estimated to provide additional gas production of 7 MMscfd and Bukit Tua Phase 3 to produce 14 thousand BPD of oil and 30 MMscfd of gas. Including JTB, these three projects will provide additional oil production of 14 thousand bpd and gas of 367 MMscfd.

Investor Daily, Page-9, Saturday, Nov 13, 2021

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