SKK Migas - KUFPEC Discovers New Oil and Gas Reserves in Natuna

 

    SKK Migas KUFPEC monitoringoil.com - Kuwaiti oil exploration company K.S.C.C. (KUFPEC) through a company operating in Indonesia, the Cooperation Contract Contractor (KKKS) KUFPEC Indonesia (Anambas) BV (KUFFPEC Indonesia) which has a contract with the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), has discovered oil and gas reserves new. 

Blogger Agus Purnomo in SKK Migas

    This is based on the results of drill stem tests conducted at the Anambas-2X exploration well in the Anambas Block, Natuna Sea, off the coast of Indonesia.

    The block is operated by KUFPEC Indonesia (Anambas) B.V. (KUFPEC Indonesia), with KUFPEC Indonesia holding all 100% of participating rights. As part of the drilling program, KUFPEC Indonesia conducted five drill stem tests in Gabus Bawah, Intra Keras, and Arang Formation. 

KUFPEC

    This test resulted in a stable combined flow rate of 40 million cubic feet of natural gas (MMscfd) and 1,240 stb/d of condensate. The results of the well-deepening program also reflect the positive side of the well's original purpose and identify potential opportunities for further exploration in the deeper formations.

    This exciting discovery marks the first operational offshore exploration discovery for KUFPEC and demonstrates KUFPEC's growth and potential as an operator of offshore oil and gas projects in accordance with the KUFPEC 2040 strategy. 

    The well was drilled at a depth of 288 feet, using a jack-up rig to reach a total depth of 10,509 feet. SKK Migas Deputy for Planning Benny Lubiantara expressed his appreciation for the discovery of the Anambas-2X exploration drilling well operated by KUFFEC Indonesia.

“This discovery shows that the oil and gas potential in Indonesia is still promising. The discovery of oil and gas reserves by KUFFEC Indonesia is the second discovery of drilling results in 2022, after previously in January 2022, new oil and gas reserves were also found in the Mahakam block by other KKKS," said Benny in a release in Jakarta.

“The discovery of exploration wells by foreign companies from Kuwait shows that Indonesia's oil and gas potential is still attractive in the eyes of international investors. We hope that this discovery will encourage international oil companies (IOCs) to invest in Indonesia,” said Benny

Investor Daily, Page-9, Saturday, Feb 12, 2022

Pertamina Hulu East Kalimantan Gets Incentives from the Government

    PT Pertamina Hulu Kalimantan Timur (PHKT), a Cooperation Contract Contractor under the supervision of SKK Migas as well as part of the Pertamina Subholding Upstream Regional Kalimantan Zone 10, officially received fiscal incentive approval from the Government of Indonesia, through the Ministry of Energy and Mineral Resources (ESDM) on January 12, 2022.

Blogger Agus Purnomo in SKK Migas

    The provision of incentives to PHKT is part of the Government's strategy in order to achieve the national oil and gas production target of 1 million barrels of oil per day and 12 billion standard cubic feet of gas per day by 2030. 

    This incentive approval is given to the incentive proposal initiated by PHKT since 2020 which refers to the Minister of Energy and Mineral Resources No. 52 of 2017 concerning Gross Split Production Sharing Contracts taking into account the economics of the field in accordance with applicable regulations.

    Based on the approval letter from the Minister of Energy and Mineral Resources No. T-24/MG.04/MEM.M/2022 dated January 12, 2022, regarding the Approval of Addition of Split to the Cooperation Contract for the East Kalimantan & Attaka Working Area, PHKT gets incentives in the form of additional profit sharing/split.

    President Director of PT Pertamina Hulu Indonesia (PHI)-Regional Kalimantan, Chalid Said Salim, said that the provision of incentives is very important to encourage the continuity of oil and gas operations and the investment needed to increase the recovery of oil and gas reserves and resources in the East Kalimantan & Attaka WK.

“With this incentive, the existing and new field development plans can be continued. This incentive can support increasing reserves and maintaining PHKT production levels so that PHKT can continue to contribute to energy supply for Indonesia," he said.

    In 2021, PHKT recorded an oil production figure of 9.3 thousand barrels of oil per day (MBOPD) and gas production of 40.2 million standard cubic feet per day (MMSCFD). PHKT will continue to strive to improve performance, especially after receiving government incentives, in order to support the investment climate and national energy security.

Investor Daily, Page-9, Saturday, Feb 12, 2022

PHR Starts 2022 by drilling Three Wells

 

    PT Pertamina Hulu Rokan (PHR) - Sumatra Region started 2022, at 00:00 WIB, by drilling wells in 3 locations, namely the PRD-09 Field Rantau (Zone 1) well, MNA well - P03 Field Minas (Work Area) Rokan) and the KRG -PA1 Field Limau well (Zone 4).

Nicke Widyawati

    Drilling wells is a tradition carried out at Pertamina at the turn of the year and especially this year is monitored directly from the PHR War Room, the operational control center which was just inaugurated by the President Director of PT Pertamina (Persero), Nicke Widyawati. The event began with thanksgiving delivered by the President Director of PHR, Jaffee A Suardin.

PHR

"This activity is carried out as a form of gratitude for operating achievements in 2021 and welcoming the new year 2022 with the spirit of SUMATERA (Sustainable, Massive, To Grow, Efficient, Resilient, Aggressive). We, all members of the management and PHR officers, are present to be connected virtually from various locations from Aceh, Riau to South Sumatra," said Jaffee in his statement in Jakarta.

Blogger Agus Purnomo in SKK Migas

    Also attending the inaugural drilling event were SKK Migas officials, Deputy for Planning Benny Lubiantara, Vice President for Operations Sondang Maria, Head of SKK Migas for northern Sumatra, Rikky Rahmat Firdaus, and Director for Development of Pertamina Upstream Subholding Operations Taufiq Adityawarman.

 Jaffee also added that the drilling was carried out as an effort to demonstrate PHR's readiness and commitment to continue to focus on massive and aggressive drilling in 2022 to reach 500 wells, the majority of which are in the Rokan Block Working Area in Riau.

“Sumatra is the backbone and one of the largest contributors of crude oil in Indonesia. In 2022, the Sumatra Region is targeted to produce crude oil of 225 thousand barrels oil per day (BOPD). This is not an easy task but we will do our best to support national energy security,” he continued.

    On this occasion, Jaffee conveyed a message to all officers (as Pertamina's workers are called) to always pay attention to HSSE (Health, Safety, Security, and Environment) both in the field and in the office. Always start any work with prayer and carry out tasks by prioritizing the values ​​of AKHLAK (Trust, Competent, Harmonious, Loyal, Adaptive, Collaborative).

Investor Daily, Page-10, Monday, Jan 3, 2022

ICDCJ Convention 2021 of Upstream Oil and Gas Sector Get Investors

 

The implementation of the 2nd International Convention and Indonesian Upstream Oil and Gas 2021 (IOG 2021) is a potential event to attract investors in the upstream oil and gas sector. In this event, the government auctioned eight oil and gas blocks through two schemes, namely direct bidding and regular auctions.

I believe this convention can attract investors in the upstream oil and gas sector. It's not easy, but the steps in that direction are already there," said Chairman of the IOG 2021 Organizing Committee Lucky Agung Yusgiantoro on the sidelines of holding the 2021 IOG Convention at the Bali Nusa Dua Convention Center (BNDCC), Monday (29/11).

According to him, currently, Indonesia needs large amounts of investment in order to achieve the government's target of producing 1 million barrels of oil per day (BOPD) and 12 billion standard cubic feet of gas per day (BSCFD), by 2030.

The convention, themed Progressing Towards 1 Million Barrel of Oil per Day and 12 Billion Standard Cubic Feet Per Day, was opened by Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan, attended by Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif, Minister of Investment/Head of Coordinating Board Investment (BKPM) Bahlil Lahadalia, Deputy Minister of Finance Suahasil Nazara, and Head of SKK Migas Dwi Soetjipto.

Blogger Agus Purnomo in SKK Migas

Lucky, who is also the Chief Environmental Expert of SKK Migas, stated that in an effort to meet national energy needs, SKK Migas has set a long-term vision for the upstream oil and gas industry, in the form of achieving a production target of 1 million barrels of oil per day and 12 billion standard cubic feet of gas per day by 2020 the year 2030.

To achieve this target, SKK Migas has established a strategic plan for Indonesian Oil and Gas 4.0 which serves as a guide for actors in the upstream oil and gas sector, such as optimizing existing fields for field development plans, accelerating the transformation of resources into production with good supervision and control at each stage. field development plans, as well as accelerating Chemical Enhanced Oil Recovery in contributing to the addition of national oil production.

"The 2021 IOG Convention is an effort by SKK Migas in disseminating information about Indonesia's target of meeting energy needs from the oil and gas sector. We continue to spread the news that we are aiming to achieve that target,” said Lucky.

Auction of 8 Oil and Gas Blocks

Meanwhile, on the same occasion, the Ministry of Energy and Mineral Resources (ESDM) again opened auctions for eight oil and gas blocks this year, of which three are gas blocks. The total resources for these eight oil and gas blocks are estimated at around 500 million barrels for oil and 22.65 Trillion Cubic Feet/TCF for gas. Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Tutuka Ariadji, said that the eight oil and gas blocks were offered through two schemes, namely direct bidding and regular auctions.

"A total of 4 oil and gas blocks were offered with a direct bidding scheme and 4 blocks through regular auctions," he said.

Four oil and gas blocks are offered through this direct offer, namely the Bertak Pijar Puyuh Block with potential resources of 1.38 million tank barrels in South Sumatra, North Ketapang 270.08 million barrels, and 1,589.81 Billion Cubic Feet/BCF off the coast of East Java. , Agung I 985 BCF off the coast of East Java and Bali, and Agung II 16.5 TCF off the coast of East Java, South Sulawesi, and West Nusa Tenggara.

Next, four oil and gas blocks are regularly auctioned, namely West Palmerah Block with potential resources of 71.7 million barrels and 270.9 BCF in South Sumatra and Jambi, Pope 2,555.78 BCF off the coast of Natuna, Maratua II 107.06 million barrels. and 556.77 BCF in North Kalimantan, and Karaeng 64.2 million barrels and 182.08 BCF in South Sulawesi.

"Especially for the Bertak Pijar Quail Block, this is an exploitation block that has ever been produced," said Tutuka.

In this auction, his party offered better terms and conditions for the auction. One of them is the improvement of profit sharing (split) for the cooperation contractors who are determined to take into account the risk factors in the related oil and gas block.

Next, the signature bonus is open for bidding without a minimum limit, First Tranche Petroleum (FTP) is reduced to 10%, and the implementation of the Domestic Market Obligation/DMO obligation price of 100%.

Then, just like the first stage of the auction, oil and gas companies can choose the form of Production Sharing Contract/PSC between cost recovery and gross split. Others, there is no refund of part of the work area (relinquishment) in the third year of the contract and ease of accessing data through the Migas Data Repository (MDR) membership mechanism.

"As well as providing incentives and tax facilities according to applicable regulations," said Tutuka.

The government invites oil and gas companies that have the financial and technical capabilities, are able to meet the minimum requirements for definite commitments, as well as the terms and conditions of the auction, as well as have good performance and track record to be able to participate in the auction of this oil and gas block. For auctions through direct bidding, access to auction documents is open from November 29, 2021, to January 11, 2022.

Furthermore, the submission of participation documents can be done until January 12, 2022. For regular auctions, access to tender documents is open from November 29, 2021, to March 24, 2022, while the submission of participation documents is no later than March 25, 2022.

Optimistic

Deputy Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Fatar Yani Abdurrahman added that the response of oil and gas companies to the second phase of the auction of oil and gas blocks was very positive. This is because the fiscal provisions offered in the auction are very attractive, especially the split for contractors. In addition, the oil and gas reserves of several blocks being auctioned off are also very large.

“For example, the Agung Blocks I and II, which have large reserves of around 2-3 TCF, are also fiscally attractive. Judging from this, we are optimistic that there will be a new contract signing," said Fatar Yani.

Director and Chief Operating Officer of PT Medco International Tbk Ronald Gunawan assessed that the provisions used in the second phase of the oil and gas block auction were an innovation. One of them is related to profit sharing, it seems that the government is no longer guided by the provisions for profit sharing of 85:15 for oil and 70:30 for gas.

"Hopefully, with this new oil and gas block with breakthrough terms and conditions, it will attract more investment," he explained.

Investor Daily, Page-10, Tuesday, Nov 30, 2021

The Economy is a Challenge for the CCUS Upstream Oil and Gas Project

 

The implementation of carbon capture, utilization, and storage (CCUS) technology is the key to reducing emissions in the upstream oil and gas industry to be in line with global low-carbon initiatives. However, economic factors pose a challenge to the use of this technology. 

BP

    Vice President of Subsurface Asia Pacific & India BP Dan Sparkes said the technology factor is no longer a challenge for the implementation of CCUS in the upstream oil and gas industry. This is because the upstream oil and gas industry has experience in injecting CO2 into the bowels of the earth. The main challenge in implementing this CCUS is its economy.

“I think the first thing that must be done for the project to operate is to seek profit from this project (CCUS). Enhanced oil recovery (EOR) based on CO2 is the easiest example," he said at The 2nd International Convention on Indonesian Upstream Oil and Gas 2021 in Bali, Monday (29/11).

Another example is the CCUS Project in the Tangguh Liquefied Natural Gas/LNG refinery complex which is managed by his party. In the refinery project, carbon capture facilities are available, so the expensive investment requirements of the CCUS project have actually been paid for.

"So this kind of project does not need as many incentives as CCUS projects in new oil and gas fields," said Sparkes.

Another thing that can be done to attract investors to work on this CCUS is to set a price for carbon emissions. Not only attracting investors, but the pricing of carbon emissions will also help CCUS projects that are on the verge of the economic threshold.

"So that it can fulfill the economy at a cheaper price," he added.

Blogger Agus Purnomo in SKK Migas

Regarding the implementation of CCUS, the Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto revealed that his party is ready to provide support in the form of incentives according to the needs of each CCUS project.

The reason is, cutting carbon emissions has become a policy of the Government of Indonesia, so it must be carried out. He admits that the economy is indeed the key to the CCUS project or not. However, his party will ensure that other costs other than the need for CCUS technology must be as efficient as possible.

“Capex (capital expenditure) apart from low-carbon initiatives, must be really efficient. So, if CCUS is added, the economy can still be maintained. But if it is maximal, it is impossible to operate without incentives, as a consequence, it must provide incentives, "explained Dwi.

Indonesia has great potential for carbon capture. This is because many oil and gas reservoirs have started to run out of reserves. This reservoir can be used to store carbon emissions captured using CCUS technology. His party is mapping out which oil and gas fields can be the location of this CCUS.

"This can be offered to countries near the location to be able to use the storage, as well as to other industries. So if the gas is empty, we can sell storage, "he explained.

Already Rolling

The Ubadari Field development project and the Vorwata Carbon Capture Utilization and Storage (CCUS) project carried out by BP Berau Limited are some of the CCUS projects already underway in Indonesia. According to Deputy Head of SKK Migas Fatar Yani Abdurrahman, the Plan of Development/POD for the project was approved some time ago. Now, his party has signed a memorandum of understanding with BP to ensure this project takes place.

"With the memorandum of understanding, it will accelerate the approval for BP to reach the FID (Final Investment Decision)," he said.

He explained that with the memorandum of understanding lasting for one year, his party hoped that an agreement could be reached with BP so that the CCUS project could be implemented.

"This CCUS is still new, so we really have to study what can be applied again, we are looking for the right way and technology," added Fatar.

Investor Daily, Page-10, Tuesday, Nov 30, 2021

61 Oil and Gas Producing Regions Still Disappointed

 

    A total of 61 local governments still have to be disappointed because regulations are not strong enough to involve oil and gas producing regions in obtaining a 10% participating interest.

Blogger Agus Purnomo in SKK Migas

    Head of the Legal Division of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Didik Setyadi said that until November 2021 there were still 61 regions that were carrying out the 10% Participating Interest (PI) bidding process.

    According to Didik, one challenge that makes it difficult for regions to get a 10 percent PI is caused by regulations that do not explicitly regulate sanctions for contractors who do not meet the provisions of the Minister of Energy and Mineral Resources Regulation number 37 of 2016.

"This needs attention because the nature of the business to include a 10 percent PI is good faith is cooperation, so cooperation cannot be forced on each other but must be an agreement based on both parties," he said in the Northern Sumatra Forum webinar, Thursday ( 25/11/2021).

    Didik added that the difficulty of investing in regional shares of 10 percent was also caused by the reluctance of contractors who thought it would affect the economy.

    The reason is that the Minister of Energy and Mineral Resources Regulation number 37 of 2016 is interpreted by oil and gas contractors to provide 10 percent PI shares with a maximum value so that it will have an impact on the project's economy.

    The Coordinator of the Upstream Oil and Gas Business Development Assessment of the Ministry of Energy and Mineral Resources, Yulianto, said the government would immediately revise the Minister of Energy and Mineral Resources Regulation number 37 of 2016 to make it easier for regions to get a 10 percent PI.

    The plan to revise the regulation is necessary considering that since the enactment of the Ministerial Regulation, only two regions have received a 10 percent PI, namely West Java and East Kalimantan.

"We at the Ministry of Energy and Mineral Resources have then tried, in this case, trying to improve the Ministerial Regulation in order to improve the process of bidding and transferring PI more so that it is faster and more transparent, then it can really be accepted by fellow contractors and in producing areas," he explained.

    Meanwhile, the government will revise the definition of PI with a maximum percentage of 10 percent and regulate the distribution of shares of 10 percent for districts/cities and provinces. Improvements will also be made to the obligations of Regional Owned Enterprises (BUMD) in terms of the value of the transfer, the appointment of an independent institution.

    In addition, the government will regulate the timing of the 10 percent PI offer, the effective date for the 10 percent PI, and sanctions for Cooperation Contract Contractors (KKKS) who do not offer a 10 percent PI.

the Rokan Block

    Meanwhile, Riau Governor Syamsuar said the process to get a 10% PI in the Rokan Block had gone through 9 of the 10 stages specified in the Minister of Energy and Mineral Resources Regulation No. 37/2016.

    He said that his party had reached an agreement between the five regents who were included as oil and gas producing regions from the Rokan Block and had appointed Regional Owned Enterprises (BUMD) to be included in the 10% PI.

West Java Governor Ridwan Kamil

MINIMUM INVOLVEMENT

    Meanwhile, West Java Governor Ridwan Kamil explained that there are still many areas that have not been involved in managing oil and gas working areas. This is because there are still contractors who find it difficult to cooperate with regional companies.

    Ridwan Kamil, who also serves as Chairman of the Association of Regional Oil and Gas Producers and Renewable Energy (ADPMET) said that getting PI is not as easy as it is in the applicable legislation. According to him, special lobbying is needed by the regions together with contractors.

“Everywhere, it is difficult for people to share profits, so that's the nature. That is why the success of West Java Province and East Kalimantan Province because of incentive lobbying, should not be as complicated and not as tiring,” he said.

    Ridwan Kamil added that another obstacle that is often found in oil and gas producing areas to get a 10% PI is the non-transparent lifting data from contractors. For this reason, cooperation with the central government is needed so that the regulations provided can be easier and provide transparency of the potential generated from an oil and gas working area.

"Therefore, we offer our organization to provide lobbying for the central government to make it easier," he said.

    According to him, as an area that has managed to get a 10% PI, West Java has felt the direct benefits generated both in terms of income and the multiplier effect.

PHE-ONWJ

    Ridwan Kamil explained that West Java had succeeded in obtaining business income through the regionally owned company (BUMD) PT Migas Hulu Jabar which managed the 10% PI in the ONWJ Block worth Rp 232 billion during 2017-2018.

PHE-ONWJ Block in West Java

    President Director of PT Migas Hulu Jabar Begin Troys said that in 2019, his party began to enter the electricity business, integrated energy management, gas infrastructure, and construction services in the oil and gas sector.

    As a result, in 2019 West Java's Upstream Oil and Gas earned revenue of Rp 172 billion with income from non-PI 10% increasing to 16%. In 2020, West Java's upstream oil and gas will enter the Pertamina Group's DRUPS business, manufacturing oil and gas block rigs, and the Cirompang micro-hydropower plant.

Bisnis Indonesia, Page-4, Friday, Nov 26, 2021

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