Shell Flee the Masela Block Project

SKK Migas: The reason Shell withdrew from the Masela Block due to the financial condition exposed to the corona

The coronavirus pandemic effect (Covid-19) hit many industrial and business sectors globally, also in the country. As a result of the outbreak, Royal Dutch Shell Plc (Shell) decided to leave the Masela Block Abadi Gas Project, Maluku Province. Currently, lnpex Corporation (lnpex) as the largest shareholder in the block is looking for a replacement for Shell.

lnpex Corporation (lnpex)

"Yes, that's right (Shell is retiring). Inpex is looking for a replacement," said Deputy of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Julius Wiratno.

the Masela Block

According to him, the reason for Shell's withdrawal from the Masela Block development project was because of the cash flow conditions that were affected by the Covid-19 pandemic situation. Shell decided to focus on other projects that were taking place in Indonesia. 

Royal Dutch Shell Plc (Shell)

    In the Masela Block, Shell has a 35% stake, while Inpex Corporation 65%. Later, the local government will receive a 10% share of participation taken from the ownership of Shell and lnpex.

"In a number of projects in other countries, it is also lacking or not going well so that the company's cash flow is not good. They (Shell) focus first on a number of projects that have already taken place," said Julius.

Now, both lnpex Corporation and Shell are continuing discussions on the option to take over the full participation by lnpex. In addition, the option to search for new partners also appears by lnpex. 

Rhea Sianipar

    Shell Indonesia management does not want to comment on the development of the Masela Block Abadi Gas Project. Regarding the question above, I have no comment, "said Shell Indonesia's External Relations VP Rhea Sianipar.

Dwi Soetjipto

Previously, SKK Migas Head Dwi Soetjipto mentioned the condition of the liquefied natural gas (LNG) business which was currently in decline, causing several oil and gas companies to worry about the project implementation, including for the Masela Block.

"Currently the oil and gas industry is facing serious problems including LNG prices. There is the fear of project owners such as the Masela Block to execute projects going forward," Dwi Soetjipto said.

The schedule can be Delayed

Julius added that it was not impossible that the time to implement the Masela Block Abadi Gas Project would increase or reverse the original schedule. However, SKK Migas ensures that lnpex is committed to completing projects on time. The Masela Block is targeted to be streamlined in 2027.

On October 11, 2019, Inpex Corporation and Shell Upstream Overseas Ltd together with SKK Migas signed a cost recovery revenue-amendment contract including an additional seven years of allocation and extension of the Abadi liquefied natural gas refinery project with SKK Migas.

The signing marked the implementation of a formal agreement on the terms of the cooperation contract that was previously agreed upon and announced in July 2019. Previously, PT Pertamina (Persero) had expressed interest in participating in the project. Pertamina once sent an official letter to conduct strategic talks on the management of the gas field in 2011 and 2016.

Drama in the Masela Block

Shell Flee from the Masela Block

A series of dramas colored the process of developing the Masela Block. After Shell intends to flee, the manager of Masela, Interp Corporation, must work to secure the project. As a flashback, in the middle of 2019, the Indonesian government and Inpex Corporation had agreed on the Masela Block development plan.

At that time the Minister of Energy and Mineral Resources (ESDM) Ignasius Jonan had to go back and forth from Jakarta-Tokyo to conduct very difficult negotiations. On Tuesday 16 July 2019, finally the Masela Block POD revised document was signed by SKK Migas Chief Dwi Soetjipto and CEO of Corporation Corp Takayuki Ueda at the Merdeka Palace, witnessed by President Joko Widodo and ESDM Minister Ignasius Jonan.

The agreement with an investment value of around US $ 18.5 billion to the US $ 19.8 billion is the culmination of the back and forth negotiations over the development of the Masela project over the past 20 years. Development of the Abadi Gas Field, the Masela Work Area uses an onshore LNG scheme, with lnpex as the operator.

The Abadi LNG Plant is designed to have a capacity of 10.5 million tons of natural gas per year, including around 9.5 million tons of LNG per year, 150 mmscfd of local gas supply through land pipes, and approximately 35,000 barrels of condensate per day.

Kontan, Page-12, Monday, July 6, 2020

Unexpected Masela

The twists and turns of managing the Masela Block off the coast of Maluku, according to Japanese businessmen, really made them never guessed before. What is far beyond expectations is the length of government decisions regarding the gas management model. Discovered since 1998, the Masela Block gas was just decided to be managed on land in 2016.

the Masela Block

That was one of the points delivered by The Jakarta Japan Club (JJC) President Kanji Tojo at a press conference in Jakarta last week. JJC is an association representing the commercial and industrial sectors of Japan. They conveyed a number of recommendations in the economic field to the Government of Indonesia, Masela Block was indeed filled with unexpected things.

The Jakarta Japan Club (JJC) President Kanji Tojo

There is a tug of war between the two camps, the one that believes that gas is more efficiently managed in the high seas (floating refineries in the gas source area) and the one that advocates for gas treatment on land which has lower costs. All were adamant with each other's arguments.

Inpex Corporation

In September 2015, Inpex Corporation and Shell submitted a management plan (POD) for the Masela Block at sea with an investment of 14 billion US dollars or 5 billion US dollars cheaper than the value of development on the land.

Shell

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) also suggested the same thing. Because there are still strong conflicts of interest between land and at sea, the government invites independent consultants to provide input.

SKK Migas

The result is the same, Recommendations that came out at the end of 2015 were gas processed in the high seas. But a surprising thing happened in March 2016. 

The President Joko Widodo

     At a press conference at the airport, President Joko Widodo announced the attitude that the government wanted to develop gas on land so as to demand changes or revisions to the POD. This change certainly requires a new study. The production plan that was originally realized in 2024 was delayed to the fastest in 2027.

The estimated investment will be 19.8 billion US dollars or more expensive than originally proposed. What lessons can be drawn from that? He said the government wanted to attract as much foreign investment as possible by trying to reform the bureaucracy.

Rules that are seen as holding back revoked or canceled. Unfortunately, that has not made Indonesia an attractive country for investment.

The United States trade war with China

Dozens of companies that shifted their industrial locations due to the United States trade war with China did not enter Indonesia. They are more interested in other countries in Southeast Asia.

JJC gave some recommendations. Improving the investment climate in Indonesia is their first recommendation. Some points included in this recommendation are the need for transparency regarding taxation and fiscal. In addition, the business world needs consistency of policies made by the government.

     Further about policy consistency is the statement of a number of different government officials for the same thing. For investors, this is confusing. Which words can he hold? I guess so. Similar to the story of the Masela Block, when relevant ministries and technical institutions recommend the management of gas at sea, the decision in the future is on land.

Indonesia's upstream oil and gas industry is still full of twists and turns. Hundreds of licenses, more than 300 licenses, must be managed by investors, starting with licenses at the central to regional levels.

The accumulation of permits is not accompanied by clarity when it is finished. The government has improved. As many as 56 licenses within the Ministry of Energy and Mineral Resources, for example, were revoked or canceled because they were considered to hamper investment.

SKK Migas recently launched a one-stop service policy that promised to accelerate and simplify the bureaucracy within 3 days. One is needed, consistency over the improvement.

IN INDONESIA

Masela yang Tidak Terduga 

Lika-liku pengelolaan Blok Masela di lepas pantai Maluku, menurut para pengusaha Jepang, betul-betul membuat mereka tak pernah menduga sebelumnya. Hal yang jauh di luar dugaan adalah begitu lamanya keputusan pemerintah menyangkut model pengelolaan gas. Ditemukan sejak 1998, gas Blok Masela baru saja diputuskan untuk dikelola di darat pada 2016.

Demikian salah satu poin yang disampaikan Presiden The Jakarta Japan Club (JJC) Kanji Tojo dalam konferensi pers di Jakarta, pekan lalu. JJC merupakan perkumpulan yang mewakili sektor komersial dan industri dari Jepang. Mereka menyampaikan sejumlah rekomendasi di bidang perekonomian kepada Pemerintah Indonesia Blok Masela memang dipenuhi oleh hal-hal yang tidak terduga. 

Ada tarik-menarik kuat antara dua kubu, yaitu kubu yang berpendapat bahwa gas lebih efisien dikelola di laut lepas (kilang terapung di area sumber gas) dan kubu yang menganjurkan gas diolah di darat yang beralasan ongkosnya lebih murah. Semua bersikukuh dengan argumen masing-masing.

Pada September 2015, Inpex Corporation dan Shell mengajukan rencana pengelolaan (POD) Blok Masela di laut dengan nilai investasi 14 miliar dollar AS atau 5 miliar dollar AS lebih murah dibandingkan nilai pengembangan di darat. 

Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi (SKK Migas) juga menyarankan hal yang sama. Lantaran adanya konflik kepentingan antara di darat dan di laut masih kuat, pemerintah mengundang konsultan independen untuk memberi masukan.

Hasilnya sama, Rekomendasi yang keluar pada akhir 2015 adalah gas diolah di laut lepas. Namun hal yang mengejutkan terjadi pada Maret 2016. Pada sebuah konferensi pers di bandara, Presiden Joko Widodo mengumumkan sikap bahwa pemerintah ingin pengembangan gas di darat sehingga menuntut perubahan atau revisi POD. Perubahan itu tentu saja memerlukan kajian baru. Rencana produksi yang semula bisa diwujudkan pada 2024 tertunda menjadi paling cepat tahun 2027.

Estimasi investasinya menjadi 19,8 miliar dollar AS atau lebih mahal dari yang diusulkan semula. Pelajaran apa yang bisa diambil dari hal itu? Katanya, pemerintah ingin menggaet investasi asing sebanyak-banyaknya dengan berusaha mereformasi birokrasi. 

Aturan yang dipandang menghambat dicabut atau dibatalkan. Sayangnya hal itu belum membuat Indonesia menjadi negara yang menarik untuk berinvestasi. 

Puluhan perusahaan yang mengalihkan lokasi industri mereka akibat perang dagang Amerika Serikat dengan China tidak satu pun yang masuk ke Indonesia. Mereka lebih tertarik dengan negara lain di Asia Tenggara.

JJC memberikan beberapa rekomendasinya. Perbaikan iklim investasi di Indonesia adalah rekomendasi pertama mereka. Beberapa poin yang masuk dalam rekomendasi ini adalah perlunya transparansi tentang perpajakan dan fiskal. Selain itu, dunia usaha membutuhkan konsistensi kebijakan yang dibuat pemerintah. 

Lebih jauh tentang konsistensi kebijakan adalah pernyataan sejumlah pejabat pemerintah yang berbeda-beda untuk hal yang sama. Bagi investor, ini hal membingungkan. Yang mana yang bisa dipegang ucapannya? Begitu kira-kira. Mirip dengan kisah Blok Masela, ketika kementerian dan institusi teknis terkait merekomendasikan pengelolaan gas di laut, keputusan di kemudian hari adalah di darat.

Industri hulu migas Indonesia memang masih penuh liku. Ratusan perizinan, lebih dari 300 izin, harus diurus investor, mulai perizinan di tingkat pusat sampai daerah. 

Bertumpuknya izin itu tidak disertai kejelasan kapan selesainya. Pemerintah memang sudah berbenah. Sebanyak 56 perizinan di lingkungan Kementerian Energi dan Sumber Daya Mineral, misalnya dicabut atau dibatalkan karena dianggap menghambat investasi. 

SKK Migas beberapa waktu lalu juga meluncurkan kebijakan layanan satu pintu yang menjanjikan percepatan dan penyederhanaan birokrasi dalam waktu 3 hari. Satu yang diperlukan, konsistensi atas pembenahan tersebut.

Kompas, Page-13, Wednesday, Jan 29, 2020

Inpex Signs the Masela Block Contract Amendment

Inpex Corporation through its affiliate, Inpex Masela Ltd, has signed an amendment to the Masela Block production sharing contract (PSC). The oil and gas block contract was extended by 27 years so that the contract expired in 2055. 

the Masela Block

     The signing of the PSC revision was carried out by Inpex together with its partner Shell Upstream Overseas Ltd with the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) as Indonesia's representative. The signing was witnessed directly by the Minister of Energy and Mineral Resources (ESDM) Ignasius Jonan.

Ignasius Jonan

"This signing marks the execution of a formal agreement related to the PSC period that was agreed and announced as part of the approval of the revised plan of development (POD) by the Government of Indonesia in July," it said in an official statement from Inpex.

In its official statement, Inpex explained that the announcement about the contract extension of the Masela Block had been made on July 16 last. The additional term of the contract is 7 years with an additional contract period and a contract extension of 20 years. Thus, the Masela Block contract will expire in 2055 from 2028 initially.

Masafumi Ishii with The President Joko Widodo

Japanese Ambassador to Indonesia Masafumi Ishii who also witnessed the signing of the contract amendment conveyed his appreciation for the Government of Indonesia. In his Instragram, he wrote that with this signing, the Abadi Project, the Masela Block could become a large-scale Japanese-Indonesian project.

"Eventually this project developed into a large-scale Japan-Indonesia project with an investment of US $ 20 billion, with an increase in GDP (Gross Domestic Product / gross domestic product for Indonesia of US $ 153 billion) and creating employment for 73 thousand people per year," wrote the Masafumi.

Previously, after receiving POD approval, INPEX Vice President Corporate Services Masela Ltd Nico Muhyiddin said that it was completing the preparation of an environmental impact analysis (Amdal). It has conducted public consultations with communities in a number of villages in the Tanimbar Islands Regency and is currently preparing a terms of reference.

"After Amdal, we will work on FEED (Front End Engineering Design / detailed design). "From the results of the FEED, we will know what the ship looks like, what kind of model, after that FID (Final Investment Decision / final investment decision)," said Nico.

At the same time, he also briefly said, his party was compiling a mapping of potential gas buyers from the Abadi Project. A number of companies becoming prospective gas buyers are PT PLN (Persero) and PT Perusahaan Gas Negara (PGN) Tbk. It will look for buyers at home and abroad.

"We have asked how much gas they need, which quality. But there is no contract, "he said.

After the FID is reached, the Abadi Project will enter the construction phase. During the construction phase, Inpex must undertake a number of activities, including the construction and operation of subsea gas wells and the construction of the Subsea Umbilicals, Risers and Flowlines (SURF) facilities off the Arafura coast. 

     Furthermore, Inpex also builds Floating Production, Storage and Offloading (FPSO) facilities, underwater gas pipelines from the FPSO to onshore Gas Receiving Facilities (GRFs), and LNG onshore refineries.

SKK Migas targets Proyak Abadi to start production in 2027. The project is projected to produce 9.5 million tons of gas per year in the form of liquefied natural gas (LNG) and 150 million cubic feet per day (million standard cubic feet per day / mmscfd) for gas pipelines.

IN INDONESIA

Inpex Tanda Tangani Amendemen Kontrak Blok Masela

Inpex Corporation melalui afiliasinya, Inpex Masela Ltd, telah menandatangani amendemen kontrak kerja sama (production sharing contract/PSC) Blok Masela. Kontrak blok migas ini diperpanjang 27 tahun sehingga kontraknya berakhir pada 2055. 

      Penandatanganan revisi PSC dilakukan Inpex bersama mitranya Shell Upstream Overseas Ltd dengan Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi (SKK Migas) sebagai perwakilan Indonesia. Penandatanganan ini disaksikan langsung oleh Menteri Energi dan Sumber Daya Mineral (ESDM) Ignasius Jonan.

“Penandatangan ini menandai eksekusi dari kesepakatan formal terkait jangka waktu PSC yang disepakati dan diumumkan sebagai bagian dari persetujuan revisi rencana pengembangan (plan of development/POD) oleh Pemerintah Indonesia pada Juli,” demikian tertulis dalam keterangan resmi Inpex.

Dalam keterangan resminya, Inpex menjelaskan bahwa pengumuman tentang perpanjangan kontrak Blok Masela telah dilakukan pada 16 Juli lalu. Tambahan jangka waktu kontrak ini yakni 7 tahun tambahan jangka waktu kontrak dan perpanjangan kontrak selama 20 tahun. Sehingga, kontrak Blok Masela akan berakhir pada 2055 dari awalnya 2028. 

Duta Besar Jepang untuk Indonesia Masafumi Ishii yang turut menyaksikan penandatangan amendemen kontrak tersebut menyampaikan apresiasinya terhadap Pemerintah Indonesia. Dalam Instragram-nya, dia menuliskan bahwa dengan penandatanganan ini, maka Proyek Abadi, Blok Masela dapat menjadi proyek berskala besar Jepang-Indonesia.

“Akhirnya proyek ini berkembang menjadi proyek berskala besar Jepang-Indonesia dengan investasi US$ 20 miliar, dengan pertambahan GDP (Gross Domestic Product/produk domestik bruto untuk Indonesia US$ 153 miliar dan menciptakan lapangan kerja sebanyak 73 ribu orang per tahun,” demikian tulis Masafumi.

Sebelumnya, pasca mendapat persetujuan POD, Vice President Corporate Services INPEX Masela Ltd Nico Muhyiddin mengatakan bahwa pihaknya sedang merampungkan penyusunan analisis dampak lingkungan (Amdal). Pihaknya telah melakukan konsultasi publik ke masyarakat di sejumlah desa yang berada di Kabupaten Kepulauan Tanimbar dan kini sedang menyusun kerangka acuan.

“Setelah Amdal, kami akan mengerjakan FEED (Front End Engineering Design/desain rinci). Dari hasil FEED, kami akan tahu kapalnya seperti apa, modelnya seperti apa, setelah itu FID (Final Investment Decision/keputusan akhir investasi),” ujar Nico.

Pada saat yang sama, dia juga sempat menuturkan, pihaknya menyusun pemetaan calon pembeli gas dari Proyek Abadi. Sejumlah perusahaan menjadi kandidat pembeli gas ini adalah PT PLN (Persero) dan PT Perusahaan Gas Negara (PGN) Tbk. Pihaknya akan mencari pembeli di dalam maupun luar negeri.

“Kami sudah menanyakan mereka butuh gasnya berapa, kualitasnya yang mana. Tetapi belum ada kontraknya,” kata dia.

Setelah FID tercapai, Proyek Abadi akan masuk tahap konstruksi. Pada tahap konstruksi, Inpex harus mengerjakan sejumlah kegiatan, meliputi pembangunan dan pengoperasian sumur gas bawah laut dan konstruksi fasilitas Subsea Umbilicals, Risers and Flowlines (SURF) di lepas pantai Arafura. 

     Selanjutnya, Inpex juga membangun fasilitas produksi, penampungan dan bongkar muat terapung (Floating Production, Storage and Offloading/FPSO), pipa gas bawah laut dari FPSO ke fasilitas penerima gas (Gas Receiving Facility/GRF) di darat, serta kilang LNG di darat. 

SKK Migas menargetkan Proyak Abadi akan mulai berproduksi pada 2027. Proyek ini diproyeksikan menghasilkan gas sebesar 9,5 juta ton per tahun dalam bentuk gas alam cair (Liquefied Natural Gas/LNG) dan 150 juta kaki kubik per hari (million standard cubic feet per day/mmscfd) untuk gas pipa.

Investor Daily, Page-9, Thursday, October 17, 2019

Gas Supply and Production Increases

Increased gas needs and production make exploration of new gas blocks or revitalize old blocks into a necessity.

The IEA PREDICTION is not wrong. However, the prediction was made before the discovery of gas in the Masela Block, Maluku and Makassar Straits, "said the Minister of Energy and Mineral Resources Ignatius Jonan when he became one of the speakers at 27th World Gas Conference in Washington DC, USA, Wednesday (27/6).

the Masela Block

Jonan said it answered the question of moderator Nobuo Tanaka. Tanaka said based on predicted International Energy Agency (IEA), in 2040, Indonesia became a gas importer.

"Do you agree with that prediction?" Tanaka asked.

For information, Indonesia will get additional gas capacity supply from Makassar Strait of 1,000 mmscfd (million standard cubic feet per day) and from Masela 1,200 mmscfd.

That does not include gas production in Rokan, Riau. Operators in the Masela Block are Inpex and Shell, while the operator in the Makkasar Strait is Chevron. Increased gas demand is partly due to the energy mix program. In his presentation, Jonan revealed that in 2025 the use of gas is targeted to reach 22% and in 2050 by 24%.

Inpex Corporation

The increased need for exploration of new gas blocks or revitalizing old blocks becomes a necessity. Therefore, at the end of his presentation, Jonan hopes the new oil and gas policy will attract more investors. Before becoming a speaker at the World Gas Forum. Jonan used the opportunity to explain the government's policy on oil and gas, among others, to the US Chamber of Commerce and the ASEAN-US Business Council.

"The government treats the equivalent of foreign investors and domestic investors," said Jonan.

Oil and gas investment

Charles Freeman, Senior Vice President for Asia at the US Chamber of Commerce and Industry, asked about the sustainability of investment in the oil and gas sector related to the 2019 election. The same applies to Elizabeth Dugan from the US-ASEAN Business Council. Jonan replied the government guarantee the political year will not hamper investment in the oil and gas sector.

"Therefore, investment in the oil and gas sector is a long-term investment," said Jonan.

Pertamina CEO Nicke Widyawati

One who accompanied the visit of the Minister of Energy and Mineral Resources Ignasius Jonan is Plut Pertamina CEO Nicke Widyawati. After listening to Jonan's exposure, Nicke explained that the biggest gas demand is for power plants and industries. In line with Jonan, Nicke said the increase in production becomes imperative.

"We certainly have to increase production. First by increasing production capacity and second building infrastructure, "She said.

Nicke asserted Pertamina's role in increasing gas production is very important.

"From start up, our gas production will increase as there are several working areas given to Pertamina. This will certainly increase our supply or upstream production capacity. Second, the infrastructure, namely gas pipeline and LNG, that must be built, "said Nicke.

Media Indonesia, Page-13, Friday, June 29, 2018

Pertamina shells out dividends to govt

State-owned oil and gas company Pertamina says it has transferred Rp 8.57 trillion (US$613.18 million) in dividend to the government from the Rp 33.3 trillion net profit it booked in 2017. The dividend payment was agreed on Wednesday during the annual shareholders meeting.

Nicke Widyawati

Pertamina acting president director Nicke Widyawati said that 2017 was full of many challenges for the company as a result of the hike in crude oil prices and the rupiah's depreciation against the US dollar.

"Throughout the year, the company tried to maintain a positive financial performance amid the global increase in oil prices. We focused on strategic projects while carrying out efficiency in all lines. As a result, we could still record an increase in revenue,” Nicke said in a statement on Wednesday Pertamina recorded $42.96 billion in its 2017 revenue, or 18 percent growth from $36.49 billion in revenue the previous year.

Sales of crude oil in both the domestic and international markets was the main contributor to revenue growth, with the Indonesian Crude Price (ICP) reaching $51.17 per barrel, while the reference price in the state bud get was $48 per barrel. Meanwhile, gas production also increased from 650 million barrels of oil equivalent per day (mboepd) in 2016 to 693 mboepd in 2017.

"The production of the Banyu Urip field and Pertamina’s other overseas fields contributed particularly to the increase in oil and gas production,” said Nicke, adding that the company also increased its geothermal production to 3,900 GWh in 2017 from 3,043 GWh, a 27 percent year-on-year growth.

Jakarta Post, Page-14, Friday, May 4, 2018

Performance of Oil and Gas giant is Shiny

The increase in crude oil prices became one of their performance factors during the first 3 months of this year is very shining. The nickname The Seven Sisters taken from Greek mythology appeared in the mid 1940s. At that time, seven oil and gas companies were Anlo-Iranian Oil Company (now BP), Gulf Oil (now part of Chevron), Royal Dutch Shell, Standard Oil Company of Califonia (now Chevron), Standard Oil Company of New Jersey now part of ExxonMobil), and Texaco (merged into Chevron).

The seven companies are the first group dubbed The Seven Sister because it has a big influence on world oil production. Although the nickname has begun to fade with the presence of the Organization of Petroleum Exporting Countries (OPEC), but the perception is still attached to the four major companies, namely ExxonMobil, Chevron, Shell, and BP. 

     On the other hand, upstream oil and gas business was disrupted along with the decline in world oil prices to the level of lows at the level of US $ 25 per barrel in the early period of 2016. However, the dark period for oil and gas companies has begun to end, especially when world oil prices began to rise again during the first 4 months of this year.

As of Monday, West Texas Intermediate (WTI) oil prices rose 11.5% to US $ 67.37 per barrel compared to the end of last year, while Brent oil prices had risen by 10.13% to US $ 73, 65 per barrel compared to the end of 2017. Along with the surge, the performance of the Seven Sisters, except BP, which has not released its first quarter / 2018 financial report, posted a significant net income increase.

Royal Dutch Shell posted the largest net profit and growth. Shell recorded a 68.67% net profit growth in the first quarter of 2018 to US $ 5.7 billion compared to the same period in 2017. Royal Dutch Shell chief executive officer Ben Van Beurden said the first quarter net profit gained strong support from higher oil and gas positions. The ongoing business process through integrated gas business is also one of the contributors to the company's performance.

"Our upstream oil and gas business is still able to increase profits when downstream oil and gas business is less profitable," he said through Shell's official website on Monday (30/4).

Similarly, ExxonMobil, the US-based company, posted net profit growth of 15.96% to US $ 4.65 billion compared with US $ 4.01 billion in the same period last year, ExxonMobil Chief Executive Officer Danen W Woods said , the rise in commodity prices became the main supporter of profit increase during the first 3 months of this year. In addition, ExxonMobil also continues to operate efficiently and strengthen its business portfolio.

"Through new inventions [inventories] and acquisitions, we have also made good progress in plans to improve the production mix, as well as boost sales of premium products in downstream and chemical businesses. On the other hand, Chevron posted net profit growth in the first quarter of 2018 of 5.64% to US $ 3.63 billion compared to the first quarter of 2017.

Chevron Chief Executive Officer Michael Wirth said net profit in the first quarter of this year recorded a significant increase compared to last year. The profit earned by one of the Seven Sister companies is due to a combination of increased production and rising world oil prices.

"We also recorded an increase in cash flow due to support combination of upstream margins and volume levels of production. Our increase in oil and gas production is supported development of shale [oil and shale gas] in the Permian Basin to drive up production there to 65% compared to last year, "he said.

DOWNSTREAM IS DARK

Nevertheless, the three companies are compact record revenue drop in the downstream sector of oil and gas. Shell recorded a 30% drop in oil and gas downstream revenues to US $ 1.8 billion. Then, total downstream net income, ExxonMobil posted a huge decline of 15.77% to US $ 940 million.

Chevron also posted lower downstream oil and gas revenues by 21.38% to US $ 728 million compared to the first quarter of last year. Reforminer Observer Pri Agung Rakhmanto said the income in the downstream sector of The Seven Sisters happened because the income in the previous year was better along with the low oil price. This is inversely proportional to the upstream conditions, after massive efficiency becomes a big advantage when oil prices soar.

"The prospects of downstream oil and gas and upstream oil and gas business may be profitable or not opponent as the movement of dynamic oil prices. The reason, determining investment timing, not oil price developments, "he said.

Well, along with the movement of oil prices that direction continues to climb, does not mean the downstream earnings prospects will continue to fall. If oil prices continue to stabilize, there is an opportunity for upstream and downstream sector of oil and gas to come back positively together in the future.

IN INDONESIA

Kinerja Raksasa Migas Makin Kinclong

Kenaikan harga minyak mentah menjadi salah satu faktor kinerja mereka selama 3 bulan pertama tahun ini sangat bersinar. Julukan The Seven Sisters yang diambil dari  mitologi Yunani ini muncul pada pertengahan 1940-an. Saat itu, tujuh perusahaan migas yang tergabung antara lain Anlo-Iranian Oil Company (sekarang BP), Gulf Oil (sekarang bagian dari Chevron), Royal Dutch Shell, Standard Oil Company of Califonia (sekarang Chevron), Standard Oil Company of New Jersey (sekarang bagian dari ExxonMobil), dan Texaco (dimerger ke dalam Chevron).

Ketujuh perusahaan itu adalah grup pertama yang dijuluki The Seven Sister karena punya pengaruh besar terhadap produksi migas dunia. Kendati julukan itu sudah mulai pudar seiring dengan hadirnya Organization of Petroleum Exporting Countries (OPEC), tetapi persepsi masih melekat kepada empat perusahaan besar itu, yakni ExxonMobil, Chevron, Shell, dan BP. 

     Di sisi lain, bisnis hulu migas sempat terganggu seiring dengan penurunan harga minyak dunia hingga ke level tevendah pada level US$ 25 per barel pada periode awal 2016. Namun, periode gelap bagi perusahaan migas sudah mulai berakhir, terutama ketika harga minyak dunia mulai meningkat kembali sepanjang 4 bulan pertama tahun ini.

Sampai perdagangan Senin (30/4), harga minyak West Texas Intermediate (WTI) naik 11,5% menjadi US$67,37 per barel dibandingkan dengan akhir tahun lalu, sedangkan harga minyak Brent sudah naik sebesar 10,13% menjadi US$73,65 per barel dibandingkan dengan akhir 2017. Seiring dengan lonjakan kenaikan itu, kinerja the Seven Sisters, kecuali BP yang belum merilis laporan keuangan kuartal I/2018, mencatatkan lonjakan pendapatan bersih cukup signifikan.

Royal Dutch Shell mencatatkan laba bersih dan pertumbuhan terbesar. Shell mencatat pertumbuhan laba bersih pada kuartal I/2018 sebesar 68,67% menjadi US$ 5,7 miliar dibandingkan dengan periode yang sama pada 2017. Chief Executive Officer Royal Dutch Shell Ben Van Beurden mengatakan, laba bersih pada kuartal pertama ini mendapatkan dukungan kuat dari posisi harga minyak dan gas yang lebih tinggi. Proses bisnis yang berkelanjutan lewat bisnis gas terintegrasi juga menjadi salah satu penyokong kinerja perusahaan.

“Bisnis hulu migas kami masih mampu meningkatkan keuntungan di saat bisnis hilir minyak dan gas yang kurang menguntungkan ujarnya melalui situs resmi Shell, Senin (30/4).

Begitu juga dengan ExxonMobil, perusahaan yang berasal dari AS itu mencatat pertumbuhan laba bersih sebesar 15,96% menjadi US$4,65 miliar dibandingkan dengan periode yang sama pada tahun lalu senilai US$ 4,01 miliar, Chief Executive Officer ExxonMobil Danen W Woods mengatakan, kenaikan harga komoditas menjadi pendukung utama kenaikan laba sepanjang 3 bulan pertama tahun ini. Selain itu, ExxonMobil juga terus melakukan operasi secara efisien serta memperkuat portofolio bisnis.

“Lewat penemuan-penemuan [cadangan migas] baru maupun akusisi, kami juga telah membuat kemajuan yang baik dalam rencana meningkatkan bauran produksi, serta mendorong penjualan produk premium di bisnis hilir dan kimia ujarnya. Di sisi lain, Chevron mencatatkan pertumbuhan laba bersih sepanjang kuartal I/2018 sebesar 5,64% menjadi US$ 3,63 miliar dibandingkan dengan kuartal I/2017.

Chief Executive Officer Chevron Michael Wirth mengatakan, laba bersih pada kuartal pertama tahun ini mencatatkan kenaikan signifikan dibandingkan dengan tahun lalu. Keuntungan yang didapatkan salah satu perusahaan The Seven Sister itu karena kombinasi kenaikan produksi dan kenaikan harga minyak dunia.

“Kami pun mencatatkan kenaikan arus kas karena dukungan kombinasi margin hulu dan tingkat volume produksinya. Kenaikan produksi migas kami disokong 

pengembangan shale [minyak dan gas serpih] di Permian Basin hingga mendorong kenaikan produksi di sana sampai 65% dibandingkan dengan tahun lalu,” ujarnya.

HILIR SURAM 

Meskipun begitu, ketiga perusahaan itu kompak mencatatkan penurunan pendapatan pada sektor hilir migas. Shell mencatat penurunan pendapatan bersih hilir minyak dan gas sebesar 30% menjadi US$ 1,8 miliar. Lalu, pendapatan bersih hilir secara total, ExxonMobil mencatatkan penurunan sangat besar, yakni 15,77% menjadi US$ 940 juta.

Chevron pun mencatatkan penurunan pendapatan bersih hilir migas sebesar 21,38% menjadi US$ 728 juta dibandingkan dengan kuartal pertama tahun lalu. Pengamat Reforminer Pri Agung Rakhmanto menilai, pendapatan pada sektor hilir The Seven Sisters itu terjadi karena pendapatan pada tahun sebelumnya lebih bagus seiring dengan harga minyak rendah. Hal itu berbanding terbalik dengan kondisi di hulu, setelah melakukan efisiensi besar-besaran menjadi keuntungan besar ketika harga minyak melonjak.

“Prospek bisnis hilir migas maupun hulu migas bisa saja mencatatkan keuntungan atau tidak berlawan seiring pergerakan harga minyak yang dinamis. Pasalnya, timing investasi yang menentukan, bukan perkembangan harga minyak,” ujarnya.

Nah, seiring dengan pergerakan harga minyak yang arahnya terus menanjak, bukan berarti prospek pendapatan hilir bakal terus turun. Bila harga minyak terus stabil, ada peluang sektor hulu dan hilir migas akan kembali positif bersama-sama ke depan.

Bisnis Indonesia, Page-30, Wednesday, May 2, 2018

ESDM Auditing of Inpex Funds US $ 1.6 M

A letter from the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) was sent to the editor of KONTAN. The letter numbered SRT-0138/SKKMA0000/2017/SO is related to the development of Abadi Field, Masela Block.

Blogger Agus Purnomo In SKK Migas

 The SKK Migas letter was addressed to Inpex Masela Ltd. dated 22 May 2017. In the letter, the government agreed to all Inpex's wishes in developing the Masela Block. The Ministry of Energy and Mineral Resources (ESDM) confirmed the letter. ESDM admits that the government is encouraging Inpex to immediately conduct a preliminary design study of the Abadi Field, Masela.

Abadi Field, Masela Block.

There are five important points in the letter. First, the government is willing to replace US$ 1.6 billion in cost recovery. Second, SKK Migas approved a production capacity of 9.5 million tons of liquefied natural gas (LNG) per year and pipe gas of 150 mmscfd.

Blogger Agus Purnomo In SKK Migas

 Third, Inpex received a seven-year change of time, from the contract expiring in 2028 to 2035. This is because since 1998 the policies in the Masela project have often changed. Fourth, SKK Migas will discuss the addition of the Masela contract for a period of two to 10 years. Fifth, the location of the onshore LNG plant around Yamdena Island, West Saumlaki, East Saumlaki, and Kore on Selaru Island.

 Arcandra Tahar, Deputy Minister of Energy and Mineral Resources confirmed that SKK Migas' letter to lnpex is being audited, including approval of a refund of approximately US$1.6 billion to Inpex Masela Ltd.

"It doesn't necessarily mean that the letter given is approved, but it will be audited first," said Arcandra.

 The replacement of US$ 1.6 billion is not in the form of cash, but cost recovery when the Abadi Field is already in production. According to the contract, Masela Block will continue to use cost recovery profit-sharing instead of a gross split.

 Meanwhile, Fahmi Radhi, an Energy Observer from Gadjah Mada University, said that the state should not spend US$ 1.6 billion for Inpex Masela Ltd. as compensation for the presidential decision to move the refinery from onshore to offshore.

"Reimbursement of that amount does not guarantee that the Masela Block will start operating immediately. Inpex Masela Ltd. still needs to recalculate for offshore operations," he added.

Unfortunately, Amien Sunaryadi, the Head of SKK Migas, did not answer KONTAN's confirmation about the replacement of the funds.

 Deputy for Procurement Control of SKK Migas, Djoko Siswanto, only answered briefly. "Sorry I don't deal with that anymore," he said.

 Inpex Corporation Senior Communication Manager Usman Slamet also did not answer the question of the change in funds. The government targets that within three months there will be gas buyers for the Masela Block.

"We prioritize domestic first," said Arcandra, Sunday (30/7).

 Now, the government is waiting for lnpex and Shell to do a pre-Front End Engineering Design (feed).

"The SKK Migas letter is ready, they should start working," said Arcandra.

The Masela Block is managed by PT Inpex Masela Ltd.(65%) and Shell Upstream Overseas Services Ltd (35%).

Kontan, Page-14, Monday, July 31, 2017